Abstract

Since carbon risk has a large differential effect on business activities, a strategy for responding to carbon regulations becomes a survival strategy of a firm, so the role of governance is important. In this study, it is verified whether a company with good governance has lower carbon risk than that with poor governance, and at the same time, whether the negative impact of carbon risk on corporate value is mitigated by the role of governance. As a result of the analysis, first, a firm with good governance shows a lower carbon risk compared to that with poor governance. This is interpreted that managers actively respond on carbon risk management in companies with good governance. Second, it is found that the decrease in firm value due to carbon risk is alleviated in a firm with good governance, which can be interpreted as investors’ positive evaluations for the role of governance on carbon risk management. This study is significant as it is the first study to examine the effect of governance on carbon risk, and whether governance mitigates the negative relationship between carbon risk and firm value. This study will provide important implications for managers, shareholders, and potential investors by verifying the impact of governance on carbon risk and verifying how investors perceive the role of governance.

Keywords

• Governance
• Carbon risk
• Firm value

Related Articles

• A Study on the Requirements of Value－upCompanies under the Estate Tax Act

  Chung－Jin Shim

  25(6) 75-100

  Abstract Full Text for PDF

• Voluntary Disclosure of Corporate Governance Report and Firm Value

  Yeo－Jin Kim , Ahn Sunghee

  21(2) 127-156

  Abstract Full Text for PDF

• A Study on Relationship of Corporate Governance with Accounting Quality and Firm Value, Taking Endogeneity into Consideration

  Rho, Joon Hwa

  18(3) 9-39

  Abstract Full Text for PDF

• A Study on the Effect of Corporate Governance Structure on the Relationship between Tax Sheltering and Firm Value

  Unseung Son , Dong-Hoon Yang , Sang Cheol Lee , Kapsoon Kim

  13(3) 385-419

  Abstract Full Text for PDF

• Corporate Governance, Accounting Information, and Firm Value－A Comparative Study on Korea and U.S. Capital Markets－

  Joonwhan Oh

  10(4) 75-115

  Abstract Full Text for PDF