Is Education Beneficial to Environmentally Friendly Behaviors? Evidence from CEOs

Corporate environmental investment decisions play a crucial role in the protection of the public environment. As the decision-maker and executor, the environmental consciousness and social responsibility of the chief executive officer (CEO) has a long-term impact on the company’s environmental protection strategy, and the CEO’s level of education is a significant factor influencing the CEO’s environmental protection decisions. In this paper, we investigate the extent to which CEO education influences environmental protection investment decisions. A CEO education index is constructed as a proxy for CEO education based on the CEO’s educational background, using a panel sample of Chinese listed firms from 2010 to 2019 and providing robust evidence supporting the notioin that firms with highly educated CEOs are likely to engage in environmental protection spending activities. However, the positive relationship between CEO education and corporate environmental protection investment is reduced when the CEO also holds the position of chairman. The heterogeneity analysis shows that the positive relationship between CEO education and corporate environmental investment behavior is stronger in non-manufacturing and highly monopolistic market competitive industries. Our study contributes to the sustainability literature by providing a new impetus for corporate environmental activities from the perspective of CEO education and sheds light on the impact of the internal and external factors of firms on the investment in environmental protection. It may also help decision makers to decide whether to hire highly educated CEOs and use a dual structure of CEOs in markets with different levels of competition.