Returnee Directors and Corporate Environmental Investment: Evidence From Chinese Listed Companies

Abstract

Corporate environmental problems have attracted considerable attention in recent years. Directors who return from studying or working abroad often possess advanced green experience that can effectively address a firm's environmental issues. However, they may also instigate group conflicts regarding environmental matters, potentially hindering a company's green development. This study combines the resource dependency theory and social identity theory to investigate the relationship between returnee directors and corporate green investment, using data from Chinese listed companies from 2013 to 2020. The findings reveal a U-shaped correlation between the number of returnee directors and corporate green investment. The ownership of qualified foreign institutional investors and the level of marketization positively affect this curvilinear relationship. A further analysis indicates that these findings hold for non-state-owned enterprises and companies in which the chairperson has overseas experience. These findings make important contributions to the resource dependency and social identity theory, and provide evidence of how returnee directors influence corporate green investment through double-edged sword effects.