The impacts of tenure diversity on boardroom and corporate carbon emission performance: Exploring from the moderating role of corporate innovation

Abstract

AbstractThis paper examines the relationship between tenure diversity, corporate innovation, and carbon emission performance in developing countries, with a particular focus on the interaction model of corporate innovation in the nexus. The study is conducted in a unique setting of Indonesian firms with a high level of tenure diversity and carbon performance, excluding the financial industry from 2015 to 2021 and covering 1466 firm‐year observations. The study confirms that tenure diversity in the boardroom is a significant driver in reducing carbon emissions, as it has the potential to lower emissions during production cycles. However, the results suggest that there may be a poor decline in emissions when firms are too diverse. The authors' findings are robust and consistent over several robustness checks and endogeneity tests. This study is the first to focus on a quantitative measurement of carbon emission performance based on the Global Reporting Initiative in developing countries.