The Heterogenous Effects of Carbon Emissions and Board Gender Diversity on a Firm’s Performance

Mohammed Bouaddi, Mohamed A. K. Basuony () and Neveen Noureldin
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Mohammed Bouaddi: School of Business, The American University in Cairo, Cairo 11511, Egypt
Mohamed A. K. Basuony: School of Business, The American University in Cairo, Cairo 11511, Egypt
Neveen Noureldin: Faculty of Business, Ain Shams University, Cairo 11566, Egypt

Sustainability, 2023, vol. 15, issue 19, 1-20

Abstract: This paper investigated the effects of carbon emissions and board gender diversity on firm performance using quantile regression. This approach explores the heterogeneity of the effect of carbon emissions on the performance of firms and overcomes some of the drawbacks of OLS regression. This research aimed to identify whether carbon emissions significantly impact firm performance using accounting- and market-based performance measures and how this impact varies according to a company’s size. Another objective was to determine how females on a board of directors could impact such a relationship. The data used were a sample of 1382 companies in emerging markets from 2008 to 2021. The findings show that carbon emissions negatively affect small-size companies consisting of both high-performing and low-performing companies; however, as the size of the companies increases, the effect of carbon emissions becomes positive regardless of whether they are high- or low-performing companies. The presence of females on a board has a minimally significant negative effect on a firm’s performance, irrespective of whether it is conditioned on size. This research contributes to the literature on the impact of carbon emissions on company performance, both conditional and unconditional on size. Furthermore, the results show that the relationship between carbon emissions and performance depends on size, as revealed using the novel econometrics model developed in this study. This study also shows the importance of the presence of females on a board of directors.

Keywords: carbon emissions; gender diversity; financial performance; quantile regression; emerging markets (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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