Managerial ownership, audit quality, and carbon performance: does good governance make a difference?

Abir Akermi and Anis Ben Amar

International Journal of Productivity and Performance Management, 2026, vol. 75, issue 9, 3256-3277

Abstract: PurposeThe main objective of this study is to examine the relationship between managerial ownership, audit quality, and CO2 performance, while considering the moderating effect of good governance in industrial sector firms within European Union countries over the period 2006–2021.Design/methodology/approachOur final sample consists of 3,104 observations from European industrial firms during the period 2006–2021. To test the impact of managerial ownership and audit quality on CO2 performance, while accounting for the moderating effect of good governance and several control variables, we employed the Generalised Least Squares (GLS) method as our statistical analysis technique.FindingsAfter analyzing the data, the empirical results reveal a significant negative effect of managerial ownership on CO2 performance. Moreover, high audit quality improves CO2 performance, while strong institutional and political governance reinforces the relationships between managerial ownership, audit quality, and carbon performance.Research limitations/implicationsThe main limitation of this study is that the findings obtained from European industrial firms may not be generalisable to other regions or sectors. Furthermore, due to the rapid evolution of environmental regulations, the data may not fully capture long-term trends or changes in governance practices. Consequently, the results might not be representative of future developments.Practical implicationsFirms can use the findings of this study to enhance their governance policies by establishing more rigorous audit committees to strengthen environmental performance. Likewise, policymakers can draw on these results to design more effective regulations that encourage firms to improve their environmental performance and adopt more responsible governance practices.Originality/valueThis research provides an innovative exploration of the interaction between managerial ownership, audit quality, and good governance in relation to carbon performance. By focusing on European industrial firms, the study offers a unique regional and sectoral perspective, contributing to filling an existing gap in the literature. The integration of good governance as a moderating variable is particularly novel, allowing for a deeper understanding of the core relationships examined in this research.

Keywords: Managerial ownership; Audit quality; CO2 performance; Good governance; CSR; Industrial sector; European Union (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijppmp:ijppm-07-2025-0724

DOI: 10.1108/IJPPM-07-2025-0724

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