The influence of green trade openness, natural resources rent, institutional quality, and R&D investment on environmental sustainability in the OECD: testing the EKC and LCC hypotheses

IntroductionThis study examines the impact of green trade openness, natural resource rents, institutional quality, and R&D investment on environmental sustainability across OECD countries from 2007 to 2022, testing both the Environmental Kuznets Curve (EKC) and Load Capacity Curve (LCC) hypotheses.MethodsWe apply panel econometric techniques, including CS-ARDL and nonlinear NARDL models, alongside causality analysis, to assess bidirectional and asymmetric relationships among variables.ResultsGreen trade openness, institutional quality, and R&D investment significantly reduce CO2 emissions and enhance load capacity. Conversely, natural resource rents increase emissions and degrade sustainability metrics. The EKC hypothesis holds with an inverted-U shape, while the LCC demonstrates sustainability improvement beyond economic thresholds.DiscussionFindings stress the critical role of governance, innovation, and sustainable trade in ecological outcomes. Policy recommendations advocate reinvestment of resource rents into green innovation and strengthening of institutional frameworks to align economic and environmental goals

Corporate Sustainability and Financial Performance: The Moderating Effect of CEO Characteristics

This study aimed to investigate the effect of corporate sustainability on financial performance as well as examine whether CEO characteristics influence the association between corporate sustainability and the financial performance of listed firms in the Saudi Stock Exchange. In this vein, this study is the first to utilize multiple CEO characteristics as a moderating role influencing the association between corporate sustainability and financial performance. In addition, the study focuses on the developing country of Saudi Arabia, which is one of the top oil producers in the world and is targeting to invest billions of dollars in renewable and sustainable energy projects according to Saudi Vision 2030. We primarily focused on ESG activities (environmental, social, and governance) and their impact on the return on assets and return on equity (employed as a proxy of financial performance). This study used the ordinary least squares (OLS) model to examine these associations as well as the system GMM to test for endogeneity problems. Using a sample of 1143 observations to represent the non-financial firms listed on the Tadawul All Share Index (TASI) for 9 years from 2014 to 2022, we found a negative and significant relationship between the activities of corporate sustainability and financial performance. Furthermore, we demonstrated that CEO characteristics (CEO busyness, CEO ownership, CEO education, CEO gender, and CEO tenure) exerted influence on the association between corporate sustainability and financial performance; that is, CEO busyness, CEO ownership, and CEO gender mitigated the negative influence of corporate sustainability on financial performance, whereas CEO education and CEO tenure made it worse. The results of this study have implications for regulators, firms, and stakeholders

Testing the Impact of Renewable Energy and Institutional Quality on Consumption-Based CO2 Emissions: Fresh Insights from MMQR Approach

The motivation for this research stems from the United Nations Sustainable Development Goals (UN SDGs), specifically SDGs 7, 11, 12, and 13, which focus on the mitigation of climate change and sustainable economic development. This study examined the impact of renewable energy use, institutional quality, and production expansion on consumption-based carbon dioxide (CCO2) emissions in BRICS countries (Brazil, Russia, India, China, and South Africa) from 1996 to 2020. To achieve this, we applied advanced econometric techniques, including second-generation cointegration and unit root tests, along with the novel panel method of moments quantile regression (MMQR). The Westerlund cointegration test confirmed the presence of a long-run co-movement among renewable energy usage, economic growth, institutional quality, and environmental quality, suggesting a stable equilibrium relationship between these variables. The results from MMQR reveal that GDP has a positive and statistically significant effect on CCO2 emissions across all quantiles, indicating that economic expansion contributes to environmental degradation. In contrast, renewable energy consumption and institutional quality show negative and significant impacts on CCO2 emissions, indicating their mitigating effect on environmental deterioration. As a robustness check, the findings from fixed-effect OLS (FE-OLS), generalized method of moments (GMM), and common correlated effects mean group (CCEMG) estimations broadly confirm the results of MMQR. These findings underscore the importance of renewable energy consumption and strong institutional frameworks in promoting environmental sustainability

Board Structure, CEO Equity-Based Compensation, and Financial Performance: Evidence from MENA Countries

This paper investigates the association between board of director (BOD) structures and CEO equity-based compensation (long-term incentive) for commercial banks (conventional and Islamic banks) in MENA countries. Specifically, we take board size and board independence to measure the board structure. Furthermore, we investigate the influence of board structure on the association between CEO equity-based compensation and financial performance. Moreover, we compare conventional and Islamic banks in testing these relationships. Using a sample of 65 banks in MENA countries for the period between 2009 and 2020, we show a significant positive association between board size and CEO compensation. However, we find the same association between these variables for IBs, but the effect of board size on CEO compensation is less. We also show that board independence is negatively correlated with CEO compensation. Nevertheless, the relationship between board independence and CEO ownership is positive for IBs. For the moderating test, we find that effective board structure provides more incentives to the CEO, leading them to achieve higher financial performance. The Islamic bank’s business model (based on Shari’ah principles) contributes to the different influences of board structure on CEO compensation. Our results provide the insight that a strong and effective board is important for managing the executive’s compensation system. The findings of this study have implications for financial firms, policymakers, and regulators. Specifically, the study may help in understanding the benefits of different compensation structures relative to different types of financial firms

Influence of Cultural and Environmental Values of CEOs on Greenhouse Gas Emission Intensity

The main objective of this study is to examine the influences of two novel characteristics of the foremost executive firm managers, i.e., the environmental and cultural values of CEOs, on corporate climate change performance. Employing a sample of firms listed in the FTSE250 covering the 2008–2018 period, we found that firms run by CEOs with environmentally friendly backgrounds and high ‘green’ cultural values are more inclined to aim for better (lower) greenhouse gas emissions. The findings hold after accounting for other relevant governance characteristics, accounting and market indicators, highly carbon-intensive industries, and potential endogeneity issues. Intriguingly, we also found that the effect of CEO environmental values is more pronounced than that of CEO cultural values. Our findings have implications for corporate management and regulators of climate change concerns and corporate environmental performance. That is, firm management is advised to assign CEOs with environmentally friendly backgrounds and high ‘green’ cultural values to lower greenhouse gas emissions

The power of ESG in shaping dividend policy: Illuminating the role of financial sustainability in an emerging market.

This study investigates the impact of environmental, social, and governance (ESG) scores on dividend policy, while taking into account the moderating effect of financial sustainability. It examines data from companies listed on the Saudi Exchange, during the period spanning the years from 2013 to 2022. According to the findings of panel regression analysis, there is a strong positive correlation between ESG performance and dividend payments. In essence, businesses that exhibit strong ESG practices continuously maintain dividend payments as a way of demonstrating their dedication to both stakeholders and shareholders. Furthermore, financial sustainability exerts an enhancing influence on the ESG-dividend relationship, indicating that the positive effect of ESG on dividend yields is significant in financially sustainable companies compared to their peers. It is noteworthy that these conclusions hold up well even when put through sensitivity studies using different estimating methods. The implications of these results extend to a broad spectrum of stakeholders, including investors, management, analysts, and policymakers. They provide valuable insights for companies and markets seeking to expand their ESG initiatives

Technological Innovation and Trade Orientation as Drivers of Renewable Energy Consumption: Panel Evidence from G7 Economies

Abstract Recent advancements in industrialization have sparked substantial interest among the academic community and policymakers regarding energy consumption. The consumption patterns of distinct energy types seem to be influenced by many national and international factors. In this essence, this study investigates the effects of technological innovation and trade orientation on renewable energy consumption (REC). Using panel data from G‐7 economies from 2000 to 2019, Panel EGLS (estimated generalized least square) and ARDL (autoregressive distributed lag) models are employed to check the regression. The analysis reveals that both technological innovation and export orientation have a significant and positive impact on REC. In contrast, import orientation negatively affects REC. The results highlight that technological advancements and a focus on export‐oriented trade strategies can significantly boost REC. Policymakers are encouraged to invest in research and development to advance renewable energy technologies and provide incentives for their adoption. These measures are crucial for achieving environmental sustainability and reducing pollution. The study provides valuable insights into how national and international trade dynamics influence renewable energy usage

Effects of Risk Committee on Agency Costs and Financial Performance

This study aimed to explore the influence of risk committee characteristics on agency costs and financial performance as well as investigate whether the attributes of a risk committee moderate the association between the agency costs and financial performance of financial firms listed in the Saudi Stock Market (TASI). We primarily concentrate on six attributes of risk committees (risk committee existence, size, independence, meetings, financial expertise, and busyness) and their impact on agency costs and financial performance. This study employed the ordinary least squares (OLS) and generalized methods of moments (GMM) models to explore these relationships. Using a sample of 455 observations representing the financial corporations listed on the TASI for the period from 2010 to 2022, we found that risk committees’ existence, risk committee independence, and financial expertise have negative and significant associations with agency costs, but a positive influence on financial performance. However, risk committee size and busyness are positively related to agency costs and adversely associated with firms’ financial performance. Furthermore, we showed that agency costs influence banks’ financial performance negatively, yet risk committees oversee this risk and enhance banks’ financial performance. The findings of this study have implications for financial firms, policymakers, and regulators. Beyond making empirical contributions by investigating a relatively unexplored topic in a developing Middle Eastern economy, this analysis provides valuable insights into optimizing risk committee characteristics and structures to improve financial monitoring within the framework of Saudi Arabia. This area of research has been relatively limited compared to studies conducted in developed countries