IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v243y2024ics016517652400394x.html
   My bibliography  Save this article

The effect of co-opted boards on corporate carbon performance: Evidence from financially material industries

Author

Listed:
  • Develay, Etienne
  • Virk, Nader S.

Abstract

We examine the relationship between co-opted boards and corporate carbon performance. Results show that co-opted boards decrease GHG intensity in financially material industries with no effect in non-financially material industries. For firms in financially material industries, this relationship is time-variant and positive when we interact GHG intensity with R&D investments. This result posits inefficient R&D allocation in the presence of co-opted boards. Our findings bring a more nuanced picture concerning the influence of co-opted boards on corporate carbon performance.

Suggested Citation

  • Develay, Etienne & Virk, Nader S., 2024. "The effect of co-opted boards on corporate carbon performance: Evidence from financially material industries," Economics Letters, Elsevier, vol. 243(C).
    • Handle: RePEc:eee:ecolet:v:243:y:2024:i:c:s016517652400394x
    DOI: 10.1016/j.econlet.2024.111910
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016517652400394X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2024.111910?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chintrakarn, Pandej & Jiraporn, Pornsit & Sakr, Sameh & Lee, Sang Mook, 2016. "Do co-opted directors mitigate managerial myopia? Evidence from R&D investments," Finance Research Letters, Elsevier, vol. 17(C), pages 285-289.
    2. Stuart L. Hart & Gautam Ahuja, 1996. "Does It Pay To Be Green? An Empirical Examination Of The Relationship Between Emission Reduction And Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 5(1), pages 30-37, March.
    3. Zaman, Rashid & Atawnah, Nader & Baghdadi, Ghasan A. & Liu, Jia, 2021. "Fiduciary duty or loyalty? Evidence from co-opted boards and corporate misconduct," Journal of Corporate Finance, Elsevier, vol. 70(C).
    4. Harris, Oneil & Glegg, Charmaine & Buckley, Winston, 2019. "Do co-opted boards enhance or reduce R&D productivity?," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    5. Ghafoor, Abdul & Gull, Ammar Ali, 2024. "Do co-opted boards protect CEOs from ESG controversies?," Finance Research Letters, Elsevier, vol. 63(C).
    6. Lily Nguyen & Le Vu & Xiangkang Yin, 2021. "The bright side of co‐opted boards: Evidence from firm innovation," The Financial Review, Eastern Finance Association, vol. 56(1), pages 29-53, February.
    7. Ghafoor, Abdul & Šeho, Mirzet & Sifat, Imtiaz, 2023. "Co-opted board and firm climate change risk," Finance Research Letters, Elsevier, vol. 52(C).
    8. Sakkakom Maneenop & Chaiyuth Padungsaksawasdi & Sirimon Treepongkaruna, 2024. "Co‐opted board, environment, social and governance," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1161-1172, February.
    9. Pascal Nguyen & Sadek Ouhadouch, 2021. "The bright side of CEO-board social ties: Evidence from French firms' cash holdings," Economics Bulletin, AccessEcon, vol. 41(4), pages 2649-2656.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rahman, Dewan & Malik, Ihtisham & Ali, Searat & Iqbal, Jamshed, 2021. "Do co-opted boards increase insider profitability?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(3).
    2. Ghafoor, Abdul & Gull, Ammar Ali, 2024. "Do co-opted boards protect CEOs from ESG controversies?," Finance Research Letters, Elsevier, vol. 63(C).
    3. Bhuiyan, Md. Borhan Uddin & Sangchan, Pinprapa & Costa, Mabel D', 2022. "Do Co-opted boards affect the cost of equity capital?," Finance Research Letters, Elsevier, vol. 46(PB).
    4. Ghafoor, Abdul & Šeho, Mirzet & Sifat, Imtiaz, 2023. "Co-opted board and firm climate change risk," Finance Research Letters, Elsevier, vol. 52(C).
    5. Sun, Liang, 2023. "Internal alliance and firm risk," Global Finance Journal, Elsevier, vol. 57(C).
    6. Atawnah, Nader & Hossain, Md Zakir & Al Mamun, Md & Badarin, Louy, 2024. "Does product market competition affect corporate waste management? International evidence," International Review of Economics & Finance, Elsevier, vol. 95(C).
    7. Chaivisuttangkun, Sirithida & Jiraporn, Pornsit, 2021. "The effect of co-opted directors on firm risk during a stressful time: Evidence from the financial crisis," Finance Research Letters, Elsevier, vol. 39(C).
    8. Harris, Oneil & Nguyen, Trung, 2022. "Director co-option and future market share growth," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    9. Ullah, Farid & Jiang, Ping & Ali, Farman & Wang, Xinyi, 2024. "Rookie directors and dividend payouts: Evidence from China," Research in International Business and Finance, Elsevier, vol. 70(PB).
    10. Zaman, Rashid & Atawnah, Nader & Baghdadi, Ghasan A. & Liu, Jia, 2021. "Fiduciary duty or loyalty? Evidence from co-opted boards and corporate misconduct," Journal of Corporate Finance, Elsevier, vol. 70(C).
    11. Denise M. Keele & Susan DeHart, 2011. "Partners of USEPA Climate Leaders: an Event Study on Stock Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 20(8), pages 485-497, December.
    12. Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    13. Muhammad Khalid Anser & Zahid Yousaf & Abdul Majid & Muhammad Yasir, 2020. "Does corporate social responsibility commitment and participation predict environmental and social performance?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2578-2587, November.
    14. Evangeline O. Elijido-Ten & Peter Clarkson, 2019. "Going Beyond Climate Change Risk Management: Insights from the World’s Largest Most Sustainable Corporations," Journal of Business Ethics, Springer, vol. 157(4), pages 1067-1089, July.
    15. Wang, Moran & Li, Xuerong & Wang, Shouyang, 2021. "Discovering research trends and opportunities of green finance and energy policy: A data-driven scientometric analysis," Energy Policy, Elsevier, vol. 154(C).
    16. Marcello Risitano & Rosaria Romano & Vincenzo Rusciano & Gennaro Civero & Debora Scarpato, 2022. "The impact of sustainability on marketing strategy and business performance: The case of Italian fisheries," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1538-1551, May.
    17. Julie Dekker & Tim Hasso, 2016. "Environmental Performance Focus in Private Family Firms: The Role of Social Embeddedness," Journal of Business Ethics, Springer, vol. 136(2), pages 293-309, June.
    18. Eng, Li Li & Fikru, Mahelet G. & Vichitsarawong, Thanyaluk, 2021. "The impact of toxic chemical releases and their management on financial performance," Advances in accounting, Elsevier, vol. 53(C).
    19. Myoungjin Oh & Jungwoo Shin & Pil‐Ju Park & Sunmee Kim, 2020. "Does eco‐innovation drive sales and technology investment? Focusing on eco‐label in Korea," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3174-3186, December.
    20. Marcus Wagner, 2004. "The Porter Hypothesis Revisited: A Literature Review of Theoretical Models and Empirical Tests," Public Economics 0407014, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:243:y:2024:i:c:s016517652400394x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.