Unpacking Environmental and Social Incentives and Their Influence on Corporate Investment

Abstract
Existing research offers little insight into what motivates executives to pursue different modes of environmental and social (E&S) investment to achieve E&S corporate objectives. We argue that long-term E&S incentives motivate executives to build firm-specific E&S capabilities internally—by hiring employees with E&S knowledge and skills—and short-term E&S incentives motivate them to buy E&S capabilities externally—by acquiring targets with superior E&S performance. Using a sample of S&P 1500 firms, we find support for these arguments, and that short-term E&S incentives increase the aggressiveness executives have to complete E&S-based acquisitions and long-term E&S incentives bring more enduring E&S-related benefits. This study offers new insights into the temporality of E&S incentives and the reasons executives pursue different E&S investment modes.
Speaker Biography
Wei Shi is a Professor of Management and Director of PhD Programs at Miami Herbert Business School, University of Miami. He obtained his MBA from Tulane University and PhD in business administration from Rice University. His primary research interest focuses on how corporate governance influences strategic decisions. He has taught courses on strategic management, corporate strategy, strategic governance, and corporate governance. He coauthored the book entitled “Understand and managing strategic governance.” His research has been published at outlets such as Administrative Science Quarterly, Academy of Management Journal, Strategic Management Journal, Organization Science, Journal of Management, Journal of Management Studies, Strategy Science, and Production and Operations Management, and covered by Harvard Business Review and the Wall Street Journal. He is an associate editor of Journal of Management and sits on the editorial boards of Strategic Management Journal, Organization Science, Journal of International Business Studies, and Global Strategy Journal. He is a former board member of International Corporate Governance Society.