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Not in my backyard: intrinsic motivation and corporate pollution abatement

Author

Listed:
  • Angie Andrikogiannopoulou
  • Alexia Ventouri
  • Scott E Yonker

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.

Suggested Citation

  • Angie Andrikogiannopoulou & Alexia Ventouri & Scott E Yonker, 2025. "Not in my backyard: intrinsic motivation and corporate pollution abatement," Review of Finance, European Finance Association, vol. 29(4), pages 1067-1104.
    • Handle: RePEc:oup:revfin:v:29:y:2025:i:4:p:1067-1104.
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    File URL: http://hdl.handle.net/10.1093/rof/rfaf020
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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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