Sustainable Governance and Green Innovation: A Perspective from Gender Diversity in China’s Listed Companies

Abstract

Sustainable governance has become essential in corporate sustainable development. As female executives bring diversity to corporate governance, their impact on the corporate sustainability has attracted wide attention. Using the evidence from China’s listed companies in Shanghai and Shenzhen A-shares between 2010 and 2019, this paper examines the impact of gender diversity of executives on corporate green innovation. We find that the proportion of female executives has a significant negative impact on corporate green innovation. The results show: (1) Considering the heterogeneity of corporate risks, the negative impact of female executives on green innovation exists when the company is exposed to high risks, that is, in the subsample of firms with high risk-taking level and financial constraints; (2) considering the heterogeneity of corporate characteristics, female executives have a negative impact on green innovation in small non-state-owned companies with high separation of ownership and control; (3) considering the heterogeneity of industries, the effect of female executives on green innovation is significant in non-heavy pollution industries; (4) the mechanism test shows that patriarchy culture weakens the influence of female executives. In an environment where men are in power, the impact of female executives on green innovation is not significant; (5) taking the 2018 environmental fee-to-tax policy as a quasi-experiment, we find that female executives will instead promote corporate green innovation in areas where the environmental tax burden has increased significantly. The results imply that since corporate green innovation is a high-risk investment, female executives will make green innovation decisions more prudently based on corporate operating characteristics. This research provides a new perspective for understanding the role of female executives in corporate governance and corporate sustainable development.

Are gender‐diverse boards eco‐innovative? The mediating role of corporate social responsibility strategy

“…This argument is based on the fact that female directors bring different and unique perspectives to board table, promote more effective problem solving, and improve decision‐making process, which ultimately enhances boards' sensitivity to environmental issues (Cumming & Leung, 2021; Konadu et al, 2022; Nadeem et al, 2020). However, the findings are inconsistent for a direct relationship between gender diversity and innovation (García‐Sánchez et al, 2021; Ma et al, 2022; Moreno et al, 2018; Shukla & Teraiya, 2022; Ullah & Nasim, 2021). Inconsistent findings have led some to the assumption that having gender diversity on board may not influence directly eco‐innovation and that alternative explanations are needed (Moreno et al, 2018; Wang et al, 2022).…”

How does corporate management affect green innovation via business environmental strategies?

“…Cordeiro et al (2020) stated that female executives more concern for business environmental policies. Ma et al (2022) examine how female board directors respond to gender issues reporting and find a positive link. Orazalin and Environment (2020) A positive association was shown when the effects of board gender diversity and CSR strategy were examined in Europe.…”

The Connection between Absorptive Capacity and Green Innovation: The Function of Board Capital and Environmental Regulation

“…Unfavorable environmental issues have forced the focus on green and sustainable value creation, but doubts persist over whether sustainable development techniques can allay these concerns while enhancing sustainability and competitiveness [ 15 ]. According to Ma et al [ 65 ], environmental legitimacy is crucial in associating institutional settings with green innovation.…”

“…Additionally, the GMM can create precise equation evaluations. The delays of expected variables can be leveraged using the GMM to overcome endogeneity in panel data [ 65 ]. The GMM manages endogeneity by using “internal adjusting data”.…”