The role of endogeneity in the relationship between board gender diversity and corporate social performance: evidence from a control function method

Rey Đặng (), L.’Hocine Houanti (), Michel Simioni () and Jean-Michel Sahut ()
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Rey Đặng: ISTEC Business School – Paris
L.’Hocine Houanti: EM Normandie Business School & Métis Lab
Michel Simioni: University of Toulouse
Jean-Michel Sahut: IDRAC Business School

Annals of Operations Research, 2025, vol. 347, issue 1, No 14, 333-365

Abstract: Abstract Due to a contrasting empirical literature, we revisit the influence of board gender diversity (BGD) on corporate social performance (CSP) by carefully considering the thorny issue of endogeneity, which plagues this matter. Building on stakeholder theory (Freeman, Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.; Freeman et al., Freeman et al., Organization Science 15:364–369, 2004), we used a correlated random effects (CRE) Chamberlain-Mundlak approach and Wooldridge’s (Wooldridge, Journal of Human Resources 50:420–445, 2015) control function (CF) method to take into account the classical endogeneity issue (unobserved heterogeneity and reverse causality) (Adams, Adams, The Leadership Quarterly 27:371–386, 2016) and dynamic endogeneity (Wintoki et al., Wintoki et al., Journal of Financial Economics 105:581–606, 2012) in panel data setting. Using a sample from the 2020 Fortune 1000 list during the 2004–2020 period, we find that the impact of BGD is positive and significant on CSP. Additionally, we clearly show that the BGD-CSP relationship is endogenous and dynamic by nature. Consequently, this study sheds new light by highlighting (1) the importance of endogeneity, (2) the dynamic relationship between BGD and CSP, and (3) how combined FC-CRE approaches can alleviate these issues.

Keywords: Corporate social performance; Board gender diversity; Stakeholder theory; Endogeneity; Control function (search for similar items in EconPapers)
JEL-codes: C10 C36 G30 G34 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10479-023-05682-y

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