Gender diversity as a CSR tool and financial performance in China

Abstract

We utilize stakeholder, critical mass, and upper-echelon theories to investigate the effect of female representation on boards as corporate social responsibility (CSR) practices and firm performance of A-share listed companies in China. The indicators used were the proportion of female board members, the average age of female board members, the educational background of female directors, TOBIN Q, asset size, and leverage. We used fixed effects estimates and stationarity, stability, cointegration, and Hausman tests to analyze the data. We find that the proportion of female directors, the average age of female directors, and average educational level of female directors have a significant impact on CSR performance and financial performance, while CSR performance has a significant impact on financial performance. Given that emerging societies and their environments are usually the most susceptible to unethical corporate practices, our findings that female directors have a strategic role in enabling firms to manage their social responsibilities ethically and sustainable practices have important policy implications for regulators and stakeholders.