This study aims to explain variations in corporate carbon emissions by positioning chief executive officers (CEOs) with foreign exposure to environmental exemplars as agents of institutional change, rather than passive compliance actors. Furthermore, this study explores how the external institutional environment and internal priorities moderate the extent to which CEOs’ foreign exposure to environmental exemplars translates into firm carbon reductions.
The research focuses on A-share listed firms in China over the period 2008–2022. Hypotheses are examined using panel data, assessing how CEOs’ foreign exposure to environmental exemplars shapes carbon emissions.
The findings reveal that CEOs with foreign exposure to environmentally progressive countries significantly reduce corporate carbon emissions, with this effect amplified in state-owned enterprises but attenuated in family firms and those located in regions with a strong clan culture. Further analysis demonstrates that such international exposure actively promotes green mergers and acquisitions (M&A).
For firms facing carbon emissions risks, hiring a CEO with foreign exposure to countries with high environmental performance can help improve their sustainability profiles. Firms should actively support initiatives that provide executives with opportunities for international exposure, particularly in countries with advanced environmental practices. Governments also have a pivotal role to play by incentivizing firms to prioritize sustainability-oriented leadership.
The study underscores CEOs’ societal role in accelerating low-carbon transitions by bridging global and local sustainability norms. By institutionalizing foreign environmental practices, firms contribute to national climate goals, fostering broader ecological modernization. The findings advocate for inclusive policies that empower peripheral institutional actors while addressing cultural and economic barriers to decarbonization, ensuring equitable participation in global climate action across diverse institutional contexts.
Drawing on a transposition perspective, this research redefines CEOs as institutional transposers rather than passive recipients of domestic logics. It diverges from static views of CEO demographics by emphasizing dynamic cross-border learning processes. Furthermore, this study elucidates the connection between CEOs’ foreign exposure to environmental exemplars and carbon reductions, introducing institutional transposition via green M&A as the strategic mechanism for this transition.
