GHG emissions and firm performance: the role of CEO gender socialization
GHG emissions and firm performance: the role of CEO gender socialization
In this paper, I examine the effect of corporate greenhouse gas emissions (GHG) on profitability. I use the gender composition of the CEOs' children as an identification strategy to investigate the impact of GHG emissions on profits. CEOs who father a daughter are associated with a 10% reduction in GHG emissions. The reduction in emissions, in turn, improves profitability. A one standard deviation decrease in GHG emissions leads to a 0.14 standard deviations increase in profitability. Examining the channels, I show that CEOs with daughters are more likely to adopt a climate-integrated business strategy and set emission-reduction targets. Emission reduction affects profitability through both information advantage (protection from negative industry shocks, and lower cost of capital), and operational efficiency (lower operating costs and energy consumption) channels.
CEO daughters, CEO preference, Greenhouse gas emissions, Profitability
Homroy, Swarnodeep
bf9526ca-76e9-4d1f-8b8e-0be867b684f1
24 November 2022
Homroy, Swarnodeep
bf9526ca-76e9-4d1f-8b8e-0be867b684f1
Homroy, Swarnodeep
(2022)
GHG emissions and firm performance: the role of CEO gender socialization.
Journal of Banking and Finance, 148, [106721].
(doi:10.1016/j.jbankfin.2022.106721).
Abstract
In this paper, I examine the effect of corporate greenhouse gas emissions (GHG) on profitability. I use the gender composition of the CEOs' children as an identification strategy to investigate the impact of GHG emissions on profits. CEOs who father a daughter are associated with a 10% reduction in GHG emissions. The reduction in emissions, in turn, improves profitability. A one standard deviation decrease in GHG emissions leads to a 0.14 standard deviations increase in profitability. Examining the channels, I show that CEOs with daughters are more likely to adopt a climate-integrated business strategy and set emission-reduction targets. Emission reduction affects profitability through both information advantage (protection from negative industry shocks, and lower cost of capital), and operational efficiency (lower operating costs and energy consumption) channels.
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Accepted/In Press date: 12 November 2022
e-pub ahead of print date: 17 November 2022
Published date: 24 November 2022
Keywords:
CEO daughters, CEO preference, Greenhouse gas emissions, Profitability
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Local EPrints ID: 499347
URI: http://eprints.soton.ac.uk/id/eprint/499347
ISSN: 0378-4266
PURE UUID: 398abfec-1c90-4591-be2c-7a5d468b2aaa
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Date deposited: 18 Mar 2025 17:30
Last modified: 22 Aug 2025 02:47
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Author:
Swarnodeep Homroy
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