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Leviathan Inc. And Corporate Environmental Engagement, Po-Hsuan Hsu, Hao Liang, Pedro Matos

Research Collection Lee Kong Chian School Of Business

In a special report in 2010, The Economist called the resurgence of state-owned mega-enterprises, especially those in emerging economies, “Leviathan Inc.”, and warned about the dangers of the state capitalism model. Traditionally, state-owned firms have been criticized for poor governance and questionable efficiency. In fact, they may be better positioned to deal with market failures and externalities. Our findings based on publicly-listed firms in 45 countries suggest that government-controlled companies engage more in environmental issues, and this engagement does not come at a cost to shareholder value. The effect is more pronounced among firms in emerging market economies and in …