Impact of professor-directors on Chinese firms' environmental performance

Abstract

This study investigates the impact of academic professor-directors on Chinese firms' environmental performance. We find that the presence of board directors who are also professors has a positive impact on firms' environmental protection performance, and the result is robust after controlling for the potential endogeneity of professor-directors. This is consistent with the notion that professor board directors are perceived to take more social responsibility and are more likely to advocate for sustainability. However, this positive impact is mitigated significantly by the presence of professor board directors with administrative titles. Moreover, the above results are mainly driven by non-state-owned enterprises, firms with less powerful CEOs, firms with better analyst coverage, and firms with less financial distress. Our study highlights the importance of academic directors for firms' environmental performance.