The moderating effect of board gender diversity on the relation between corporate social responsibility and firm value

Yunyi Li, Charl de Villiers (), Lina Zixuan Li and Leye Li
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Yunyi Li: The University of Auckland
Charl de Villiers: The University of Auckland
Lina Zixuan Li: The University of Auckland
Leye Li: University of New South Wales (UNSW Sydney)

Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, 2022, vol. 33, issue 1, No 4, 109-143

Abstract: Abstract We examine whether female board representation moderates the effect of corporate social responsibility (CSR) performance on firm value. Using a two-stage dynamic panel generalized method of moments method, we find that the effect of CSR strengths (CSR concerns) on the market assessed firm value, measured by Tobin’s Q and annual stock return, is incrementally more positive (more negative) for firms with greater female representation on the board. Further analysis suggests that female board representation positively moderates the effect of CSR strengths on firm financial performance measured by return on assets (ROA); however, female board representation does not significantly moderate the impact of CSR concerns on ROA. Our findings suggest that board gender diversity enhances the effect of positive CSR performance on firm value, but exacerbates the negative market reactions to CSR concerns. Overall, our evidence suggests that board gender diversity may enhance or destroy firm value depending on a firm’s social and environmental performance in dimensions other than diversity.

Keywords: CSR; CSR concerns; CSR strengths; Board gender diversity; Firm value (search for similar items in EconPapers)
JEL-codes: G34 M14 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s00187-022-00334-x

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