Purpose
The purpose of this study is to examine the effect of stakeholder orientation in mediating the impact of female directors on environmental innovation. The authors argue that female directors are eco-friendly and more concerned with multi-stakeholder interests and demands. Thus, they promote environmental innovation by including more stakeholder-oriented values and beliefs in firm decision-making.
Design/methodology/approach
As the dependent variable in this study is a nonnegative count variable, the authors use a count data model based on Poisson regression. A sample of Chinese listed firms between 2010 and 2020 is used to test the hypotheses.
Findings
The results of this study show that female directors can enhance environmental innovation. Further, stakeholder orientation represents an intermediate channel that accounts for the effects of female directors on environmental innovation. This suggests that having women on a board can lead to better stakeholder management, which, in turn, positively affects environmental innovation. The authors also reveal that female directors contribute more to stakeholder orientation with the presence of female chairpersons.
Originality/value
A significant limitation in the literature is that little attention has been paid to the mechanisms linking female directors to firm outcomes. In the context of environmental innovation, while previous studies have investigated the influence of female directors on environmental innovation, the underlying channels of that influence remain largely unexplored. Therefore, the findings of this study advance the understanding of the effects of female directors on environmental innovation by revealing an important underlying channel – stakeholder orientation.
This study examines the double-edged effect of government directors on strategic change by conceptualizing them as strong resource provision but weak monitoring that exert the opposite impact on strategic change. Since we cannot predict which of the two effects will be larger ex ante, we do not predict a main effect. Instead, we examine resource constraints, managerial incentives, and state ownership as contingency factors. Using a sample of Chinese listed firms from 2010 to 2016, we find evidence for the prediction. This study contributes to the current literature by providing a more complete understanding of government directors.
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