The impact of governance on environmental performance: evidence from African countries

Sana Ben Abdallah (), Dhafer Saidane () and Sami Ben Mim ()
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Sana Ben Abdallah: Faculty of Economics and Management of Sfax, LED, University of Sfax, Tunisia
Dhafer Saidane: SKEMA Business School – Université Côte d''Azur
Sami Ben Mim: IHEC, LaREMFiQ, University of Sousse, Tunisia

Economics Bulletin, 2024, vol. 44, issue 1, 122 - 139

Abstract: This article assesses the impact of governance mechanisms on the environmental performance of a sample of 122 listed African firms between 2010 and 2022. We distinguish between the performance relative to the control of harmful emissions and that related to the firm's pro-environmental innovations. We also consider two governance proxies, reflecting the management quality and the corporate social responsibility strategy, respectively. The System GMM results show that enhancing the governance quality significantly contributes to promoting environmental performance. Results also reveal that the environmental scores are highly persistent, which reflects the African firms' commitment to a long-term CSR strategy. Finally, we notice that results differ from one sector to another. In particular, CSR has little effect on industrial harmful emissions and no effect on the industrial sector's ability to produce innovations. Such results suggest that the green transition in African industry is particularly difficult to implement and requires more resources.

Keywords: Governance; Environmental performance; African companies; SGMM. (search for similar items in EconPapers)
JEL-codes: G3 Q5 (search for similar items in EconPapers)
Date: 2024-03-30
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