Female board representation and innovation in Chinese firms: moderating effects of firm’s size, age, and financial constraints

Abstract

ABSTRACT Although much has been written about it, innovation in China remains a conundrum. In particular, the existing literature provides limited understanding of the underlying, internal dynamics behind Chinese companies’ innovations. To this end, this article investigates the role of female board representation – a factor increasingly viewed as important for various organisational outcomes. In addition, we explore several organisational variables through which female board representation may impact corporate innovation. We use data from listed companies in the Chinese stock market from 2003 to 2017. Our analyses show that female board representation overall has a negative effect on innovation in Chinese firms. However, upon deeper examination, much more intricate relationships emerge. Female board representation tends to promote innovation in smaller, younger, or less financially constrained firms. In contrast, it tends to be detrimental to firms’ innovation when they are large, old, or financially constrained. Findings point to an urgent need for paying more attention to critical moderators that have often been overlooked in existing research on board gender diversity. Findings also imply that how board gender diversity manifests in corporate settings can vary in different countries.