Not in my backyard: intrinsic motivation and corporate pollution abatement

Angie Andrikogiannopoulou, Alexia Ventouri and Scott E Yonker

Review of Finance, 2025, vol. 29, issue 4, 1067-1104

Abstract: We investigate whether managers’ intrinsic incentives affect firms’ environmental policies. Exploiting within-facility variation in facility-to-CEO-birthplace distances, we find that facilities located near CEOs’ birthplaces experience toxic emission reductions relative to those farther away. This is achieved by reducing waste generation at source rather than by downsizing operations or substituting pollution across locations. The effect is strongest for hometown facilities in high-polluting areas, and in firms with higher cash holdings and with CEOs with weaker pay incentives. Our results suggest that local representation in management could be a powerful means of encouraging corporate pollution abatement.

Keywords: favoritism; CEO behavior; pollution; environment; intrinsic motivation (search for similar items in EconPapers)
JEL-codes: G30 G32 G38 G41 Q53 Q54 (search for similar items in EconPapers)
Date: 2025
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