From diversity to transformation: Does board gender diversity improve firm green transformation?
Abstract
This study investigates whether board gender diversity (BGD) enhances firm green transformation in Chinese firms and examines how high pollution levels moderate this relationship. Under the Paris Agreement and China’s new environmental protection law, firms are increasingly prioritizing CO₂ reduction through strategic green initiatives, yet prior research shows mixed evidence on the role of female board representation. Using a sample of 9,548 firm-year observations from 2006 to 2022, we employ panel data regression models, controlling for firm-specific characteristics and applying robust checks for endogeneity, alternative measures, and sample heterogeneity. The results indicate that BGD positively influences firm green transformation, suggesting that gender-diverse boards are more proactive in environmental decision-making, and this effect is more pronounced in highly polluted firms. These findings are consistent across multiple robustness checks and are theoretically supported by social role theory, socialization theory, and upper echelon theory. Our study provides actionable insights for regulators, policymakers, environmental activists, and corporate managers, emphasizing the value of promoting gender diversity on boards to advance corporate environmental performance. This research contributes to the literature by clarifying the role of female directors in promoting green transformation, highlighting the contingent effect of environmental pollution.