Board gender diversity, feminine culture, and innovation for environmental sustainability

Abstract

AbstractThe environmental crisis is one of global society's most extreme grand challenges. One of the supply‐side factors that can help cope with it is corporate environmental innovation. Based on the upper echelon and value belief theory and with significant empirical analyses, our results strongly support that the presence of women on the board positively impacts innovation aimed at environmental sustainability. The results are based on a sample of 19,800 firm‐year observations of 2966 unique firms in 54 industry groups domiciled in 52 countries for the 2003–2019 period. The global distribution of the firms means that the sample is diverse enough to examine our main hypotheses. In addition, we show that culturally masculine societies, as captured by their grammatical gender marking, have a negative impact on such innovation. The masculine culture also moderates the impact of gender board diversity on innovation for environmental sustainability. Our results are robust to a battery of empirical tests and definitions, including instrumental variable approach and propensity score matching causality tests. We further explored firms' attitudes toward innovation for environmental sustainability by adding a qualitative case study research design to our quantitative analysis. That was based on semi‐structured interviews with board members and executives. The case studies provided additional support to the results in the quantitative analysis part. This study's empirical results have various broad theoretical and practical implications for board composition, taking into account the linguistic environment of the firm.