The effect of corporate governance on environmental performance in emerging markets

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2024-07-15

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en

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Abstract

During the BRICS summit in August 2023, the summit announced the planned expansion of the BRICS countries from the five current members (Brazil, Russia, India, China, and South Africa) to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. The expanded BRICS countries, 'BRICS+', would encompass 46% of the world's population. The BRICS+ countries can therefore have a large impact on the entire world, including in the field of climate change. Management scholars increasingly recognize that corporate governance has a huge impact on environmental performance. Therefore, this study investigated the difference between BRICS and BRICS+ in terms of the effect of corporate governance on environmental performance. A panel dataset with data of 1983 stock market listed companies from BRICS and a panel dataset of 2229 stock market listed companies from BRICS+ over a period of 10 years were used. The results show that state ownership has no significant relationship with the environmental performance variables in both BRICS and BRICS+. However, boardroom gender diversity has a significant relationship with two of the four environmental performance variables in BRICS and BRICS+, the coefficients are all negative. These coefficients are more negative in BRICS compared to BRICS+.

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Faculteit der Managementwetenschappen