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The Carbon Management of American Public Firms during 2011 ~ 2021 : Identification, Antecedents, and Consequences

초록

Witnessing the escalating impact of climate change on businesses and the enactment of stringent legislation to curb the rise in Earth’s temperature in Europe, studying corporate responses to climate change has become an urgent and critical matter in management literature. Unfortunately, prior studies are insufficient for several reasons. First, the majority of carbon management research has focused on defining proper carbon management. Seminal studies have presented frameworks for carbon management, asserting the operational and organizational factors for carbon mitigation. However, they have yet to fully reflect reality and generalizability due to the lack of data published by easily accessible archives. Second, prior studies have heavily endeavored to prove the necessity of carbon management by testing the positive relationship between carbon performance and financial performance, as carbon management was thought to require substantial upfront investment. This concentration has provided some pivotal evidence that carbon performance leads to financial performance. However, it has shown mixed results overall and has led to insufficient research on the antecedents of proactive carbon management. To address these gaps, I have examined the substantial and essential characterization of carbon management, as well as the antecedents and consequences of proactive carbon management in this dissertation. In light of American firms gradually reversing their infamous heavy carbon emissions through firms’ decision-making on carbon management, without the imposition of massive legislative authority compelling compliance, I analyzed American public firms spanning the years 2011 to 2021. For empirical testing, the Refinitiv Eikon ESG index has been utilized. Public firms across all industries listed in the index, except for financials, have been included in the dataset. In the first study, I identified and measured carbon management. Drawing from seminal prior studies, five factors of carbon management are categorized. In the operational aspect, efficiency improvement and supply chain management are the two factors, whereas organizational involvement, climate issue determination, and emission reduction commitment constitute the three remaining factors in the organizational aspect. Subsequently, four clusters were computed utilizing the five factors of carbon management: carbon laggard, carbon reactive, carbon active, and carbon proactive. In the second study, after establishing a single carbon management index from the five factors identified in the first study, antecedents that trigger advanced quality of carbon management were explored. Considering the heightened demand and standards regarding carbon mitigation in Europe, international experience in Europe was examined as an external aspect. Additionally, the CEO’s compensation, such as long-term stock holdings, was examined as an internal aspect, recognizing that corporate decision-making is influenced by the top manager’s interpretation of the external environment and the corresponding incentives. Carbon emissions and management skills related to climate change, varying in materiality across industries, led to the adoption of carbon materiality to strengthen the main effect influencing the level of carbon management. The state origin of Democrats, known for their favorable stance on sustainable issues, was adopted as a moderating variable to enhance the overall understanding of antecedents for advanced carbon management. It has been found that international experience in Europe and the CEO’s long-term stock holdings positively influence the level of carbon management. Particularly, for firms operating in industries where carbon-related issues are material, the CEO’s long-term compensation enhances the level of carbon management more significantly. In the third study, the acute influences of carbon management on both financial performance and carbon reduction are examined. As carbon management functions as resources and capabilities that are valuable, rare, hard to imitate, and substitute, it enhances financial performance. Additionally, through the choice of relevant products, processes, and control methods for carbon mitigation, carbon management reduces carbon emissions. The main effects are then moderated by firm efforts such as advertising and R&D expenditure, as well as CEO status such as founder. Visibility promotes carbon management, general R&D has a spillover effect on carbon management, and a founder supports a long-term shared vision for carbon management to secure his/her long-term goal. It has been found that carbon management directly enhances financial performance both in the short and long run. If a firm has high advertising or R&D investments or a founder CEO, the positive effect between carbon management and ROA strengthens. However, carbon management did not directly curb carbon emissions in the short run. Only if a firm has high advertising or R&D investments or a founder CEO, does carbon management succeed in curtailing carbon emissions. As carbon reduction enhances financial performance, the indirect effect of carbon reduction was found for a positive relation between carbon management and financial performance. In other words, if firms have high advertising or R&D investments, carbon management may enhance Tobin’s Q by the indirect effect of carbon reduction. Based on the shape of carbon management applied to every industry except financials, I was able to identify the granular antecedent and consequence effects of carbon management. This may provide researchers with avenues for further studies and offer top managers insights into what to do to institutionalize carbon management and what to expect from it.

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목차

Chapter 1. Introduction 1
1-1. Research Motivation and Purpose 1
1-2. Dissertation Overview 11
Chapter 2. Literature Review 16
2-1. Identification of Carbon Management 16
2-2. The Antecedents of Carbon Management 22
2-3. The Consequences of Carbon Management 26
Chapter 3. The Identification and Measurement of Carbon Management 31
3-1. Factors of Carbon Management 31
3-2. Characterization of Carbon Management 43
3-3. Measuring the Level of Carbon Management 46
3-3.1. Data and Sample 46
3-3.2. Analysis 49
3-3.3. Results 51
Chapter 4. The Antecedents of Carbon Management 61
4-1. Theory and Hypotheses 61
4-1.1. International Experience in Europe 62
4-1.2. CEO's Long-Term Stock Holdings 67
4-1.3. Moderating Role of Country and Industry Characteristic 70
4-1.3.1. Moderating Role of Blue State Origin 70
4-1.3.2. Moderating Role of Carbon Materiality 72
4-2. Method 76
4-2.1. Data and Samples 76
4-2.2. Measures 78
4-2.3. Analysis 87
4-3. Results 88
4-3.1. Descriptive Results 88
4-3.2. Regression Results 96
Chapter 5. The Consequences of Carbon Management 101
5-1. Theory and Hypotheses 101
5-1.1. Carbon Management and Corporate Shared Value 101
5-1.2. Carbon Management and Financial Performance 101
5-1.3. Carbon Management and Carbon Emissions 106
5-1.4. Carbon Emissions and Financial Performance 110
5-1.5. Moderating Role of Firm and CEO Characteristic 112
5-1.5.1. Moderating Role of Advertising Intensity 113
5-1.5.2. Moderating Role of R&D Intensity 114
5-1.5.3. Moderating Role of Founder CEO 116
5-1.6. The Mediating Role of Carbon Reduction 118
5-2. Method 119
5-2.1. Data and Samples 119
5-2.2. Measures 119
5-2.3. Analysis 127
5-3. Results 129
5-3.1. Descriptive Results 129
5-3.2. Regression Results 132
Chapter 6. Discussion 174
6-1. Research Questions and Findings 174
6-2. Contributions 182
6-3. Limitations and Further Studies 186
6-4. Final Conclusion 190
References 193

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