(The) effect of board gender diversity, corporate environmental and social responsibility on firm performance

Abstract

It has been reported for several decades that corporate environmental and social responsibilities positively affect firms’ financial performance. In addition, recent studies have been suggesting board diversity may have a positive impact on corporate environmental/social responsibility. In these relationships, corporate environmental/social responsibility can be endogenous, which can be started from the way of board composition in a firm because a board of directors has a crucial role in corporate decision making processes. This research first confirms the relationships among board gender diversity, corporate environmental/social responsibility, and firm performance, and shows that board gender diversity as an instrumental variable can solve the endogeneity problem of corporate environmental/social responsibility, which conclude that the impact of corporate environmental/social responsibility on firm performance becomes clearer.