Events

Prof. Jasmine Wang
Assistant Professor of Accounting
McIntire School of Commerce
University of Virginia

We examine how firms reorganize regulator-specific human capital in response to information-intensive environmental disclosure requirements. Exploiting the implementation of the U.S. Environmental Protection Agency’s Greenhouse Gas Reporting Program (GHGRP), we document a sharp increase in EPA-experienced hiring among treated firms, incremental to firms’ general green labor demand. This effect is stronger among firms with greater regulatory exposure, weaker internal environmental capabilities, and sufficient financial resources, and is attenuated for later adopters as regulatory expertise diffuses over time. In terms of hiring composition, although firms hire both technical and government-relations personnel from the EPA, hiring is concentrated at the junior level, suggesting that firms seek to acquire hands-on knowledge rather than political capital. EPA hiring is associated with fewer environmental violations among high-risk firms; however, we find no evidence of reduced regulatory scrutiny or lower penalties conditional on violations. In addition, we document reductions in carbon emissions among high emitters, alongside improvements in carbon accounting quality. Overall, the hiring patterns and improved environmental performance support a knowledge-transfer interpretation of the green revolving door.