Eco-Innovation, Corporate Governance and Nation-Level Institutions: A Cross-Country Evidence

There is a dearth of empirical research to examine how a firm's internal corporate governance mechanisms would impact eco-innovation practices under distinctive nation-level institutions. Therefore, we conducted this study to examine the individual roles of board size, board diversity (i.e., female directors' presence) and board independence in motivating a firm's eco-innovation practices in an extended cross-country setting. Furthermore, we examine whether nation-level institutions moderate our primary study associations. By employing the system generalized method of moment (SGMM) method for panel data of 19 countries from 2010 to 2021, we find a positive impact of board diversity and independence, whereas board size has a significant negative influence on a firm's eco-innovation practices. However, the political and cultural systems moderate negatively, whereas the education and labour systems and financial systems strengthen our primary findings. The results remain strong even after using additional measurements for dependent variables, addressing endogeneity concerns and using multiple estimating methods to account for bias from omitted variables. Regulators and policymakers can use these findings to formulate stringent institutional policies in regard to nation-level eco-innovation.