Interplay Between Financial Markets, Environmental Stewardship, Gender Diversity, and Firm Size in Emission-Intensive Sectors of Emerging Asian Economies: A Board-Level Perspective

Abstract

Existing research on board gender diversity often overlooks the role of firm size. It lacks a comprehensive evaluation of financial market and environmental performance, particularly in emerging markets with high gender bias. Addressing these gaps, we investigate the moderated mediation between board gender diversity, environmental stewardship, firm size, and market performance in emission-intensive sectors of emerging Asian economies with significant gender disparity. We perform FE 2-SLS regressions on a panel of 1012 firm-year observations from 96 firms (2013–2023) and test Hayes Process Macro-Model 7 on cross-sectional data from 929 firms in 2023. Results robust to alternative measures and endogeneity concerns suggest that women board directorships enhance financial market performance directly and via improved environmental stewardship. The environmental benefits, however, diminish in larger firms. Notably, gender diversity in executive roles does not affect environmental stewardship but increases financial market performance. The study introduces a novel measure of environmental stewardship and offers new insights into corporate governance, environment management, and financial markets literature, with significant implications for regulators, investors, and managers.