Woman on board, corporate social responsibility and financial performance: new evidence from China

Abstract

There are mixed findings on the impact of women directors on board (WOB) on corporate financial performance (CFP). To reconcile these mixed findings, we propose that WOB could influence CFP in the following two ways. On the one hand, WOB could enhance CFP by leading more CSR activities. On the other hand, WOB may weaken the CSR-CFP relationship due to expectations on their role-playing. These two effects go in opposite directions, and their relative strength determines the WOB-CFP relationship. Using Chinese listed firms from 2011 to 2020 as samples, the results lend strong support to these two effects. And WOB will have a positive effect on CFP only if its moderating effect on the CSR-CFP relationship has been controlled for. Additional tests show that neither critical mass nor qualification of women directors matters in explaining variations of CFP in Chinese firms. The contributions and limitations are discussed at the end of this study.