Work

Can green CEOs trigger the green premium effect?

Year: 2025

Type: article

Abstract: • Green CEOs drive the green premium in Chinese corporations effectively. • Green CEOs trigger the green premium through green innovation, reduced myopia, and transparency. • ESG practices and greenwashing thresholds moderate green CEO impact. We investigate whether green CEOs in Chinese firms contribute to the green premium effect. The findings indicate a strong positive association, as these executives are pivotal in applying the green premium. Mechanism analysis confirms that this effect is reinforced through advancements in green innovation, reductions in managerial myopia, and mitigation of information asymmetries. Notably, the influence of green environmental, social, and governance (ESG) on the green premium intensifies with higher corporate ESG ratings, highlighting a nonlinear relationship. Our analysis underscores the significance of green CEOs in fostering sustainable corporate management and operations.

Source: Finance research letters

DOI: 10.1016/j.frl.2025.107376

Authors: Chong Xu, Miaomiao Tao, Lingli Qi, David Roubaud

Institutions: City University of Macau, Wuyi University, University of Auckland, Gulf University for Science & Technology

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: hybrid

Estimated APC paid: $3,730