Socioemotional Wealth and Corporate Responses to Institutional Pressures: Do Family-Controlled Firms Pollute Less?

Abstract

This paper compares the environmental performance of family and nonfamily public corporations between 1998 and 2002, using a sample of 194 U.S. firms required to report their emissions. We found that family-controlled public firms protect their socioemotional wealth by having a better environmental performance than their nonfamily counterparts, particularly at the local level, and that for the nonfamily firms, stock ownership by the chief executive officer (CEO) has a negative environmental impact. We also found that the positive effect of family ownership on environmental performance persists independently of whether the CEO is a family member or serves both as CEO and board chair.