Board characteristics, external governance and the use of renewable energy: international evidence

Dayong Zhang, Zhiwei Zhang, Qiang Ji, Brian Lucey, Jia Liu

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Adoption of renewable energy is one of the most important steps to cope with global warming and achieve sustainability. While its supply has seen a global boom, the adoption of renewable energy from the critical demand side faces clear challenges. This paper investigates firms’ use of renewable energy, paying special attention to factors in internal corporate governance (proxied by board characteristics) and also external governance (proxied by institutional environment). Based on 1,027 listed companies in 47 countries/regions, we show statistically significant evidence that both internal and external governance matter for firms’ adoption of renewable energy. We also find significant interactions between internal and external factors. Specifically, board duality and higher executive share reduce renewable energy adoption, strong external governance increases renewable energy adoption, and firms in common law systems tend to use less renewables. Our results are robust to different specifications, which allow us to tell an international demand side story to complement the narrative on supply.
Original languageEnglish
Article number101317
Number of pages21
JournalJournal of International Financial Markets, Institutions and Money
Early online date23 Feb 2021
Publication statusPublished - 1 May 2021


  • Board characteristics
  • Corporate governance
  • External governance
  • Legal origin
  • Renewable energy


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