Female Board Directors and Corporate Environmental Investment: A Contingent View

Board diversity has become a major topic in a developed context, yet its impact has not been examined by scholars in emerging economies where the liberalization of women is not equally popular. Based on upper echelons theory, this study explores the impact of female board directors on corporate environmental investment (CEI), as well as its boundary conditions under different institutional backgrounds. Taking 463 A-share listed corporations in Shanghai and Shenzhen Stock Exchange from 2008–2017 as examples, we reveal that female board directors are positively related to CEI. In addition, provincial pollution level and regional legal development strengthen the positive relationship between female board directors and CEI. These findings contribute to upper echelons theory that board diversity facilitates corporate pro-social behaviors, especially under pressure from the external environment, emphasizing the influence of female directors’ characteristics. Our research also has managerial implications that corporations may enhance their representation of female directors for better environmental actions and subsequent better marketing performance as well as improved reputation. Moreover, the government is suggested to put forward regulations that increase the proportion of female directors in order to enhance corporate environmental investment.