Corporate ownership structure, media coverage, and environmental costs

Abstract

This article examines how corporate ownership structure and media coverage affect Corporate Environmental Responsibility (CER), mainly environmental costs. We investigate the influence of each component of corporate ownership structure (i.e., institutional ownership and managerial ownership) and media coverage on environmental costs. Our empirical results show that environmental costs have a negative association with media coverage and institutional ownership. We also find a significant curvilinear relation between managerial ownership and environmental costs. Environmental costs decrease until managerial ownership reaches 25.5%, and then it begins to increase. Our results support the view that external monitoring contributes to the reduction of environmental costs and long-term viability of firms.