Female directors, ESG performance and enterprise financialization

Abstract

In this paper, we empirically analyze the impact of female directors on enterprise financialization, and examine the role played by ESG performance based on the data of Chinese A-share listed firms between 2010 and 2021. We show that an increase in the proportion of female directors significantly inhibits enterprise financialization, and this conclusion still holds after a series of robustness tests. An increase in the proportion of female directors can inhibit enterprise financialization by enhancing enterprise ESG performance. Further research finds that the negative effect of female directors on enterprise financialization is more significant in non-state-owned enterprises and high financing constraint enterprises. Overall, we provide an effective way to weaken the risk of enterprise financialization from the perspective of firms’ internal governance structure, and expand the study of female economic behavior in enterprise governance.