Lawyers in the boardroom and firms’ environmental performance

Xianda Liu, Jiafu An, Tinghua Duan, Wenxuan Hou and Ruoran Zhao

Journal of International Financial Markets, Institutions and Money, 2023, vol. 89, issue C

Abstract: This paper studies whether and how firms’ legal environment influences their environmental performance. After presenting new evidence on the positive link between civil law origin and firms’ environmental outcomes, we propose and show that directors with legal study or work experience exert a stronger impact on firms’ environmental outcomes in civil law than in common law countries. The results suggest the compliance effect of legal directors is stronger for firms located in civil law countries than the litigation risk effect for firms in common law countries. Using a quasi-natural experiment of the Paris Agreement, we find evidence consistent with our interpretation.

Keywords: Firm emission; Legal origin; Environmental performance; Legal directors; Paris agreement (search for similar items in EconPapers)
JEL-codes: G34 G38 L14 L25 Q50 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:89:y:2023:i:c:s1042443123001427

DOI: 10.1016/j.intfin.2023.101874

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