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Does Corporate Social Responsibility Mediate the Relation between Boardroom Gender Diversity and Firm Performance of Chinese Listed Companies?

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Listed:
  • Muhammad Safdar Sial

    (School of Economics and Management of Wuhan University, Wuhan 430072, China)

  • Chunmei Zheng

    (School of Economics and Management of Wuhan University, Wuhan 430072, China)

  • Jacob Cherian

    (College of Business, Abu Dhabi University, P.O. Box 59911, Abu Dhabi, UAE)

  • M.A. Gulzar

    (Waikato Management School, The University of Waikato, Hamilton 3240, New Zealand)

  • Phung Anh Thu

    (Faculty of Finance and Accounting, Nguyen Tat Thanh University, Ho Chi Minh City 700000, Vietnam)

  • Tehmina Khan

    (School of Accounting, RMIT University, Melbourne 3000, Australia)

  • Nguyen Vinh Khuong

    (Faculty of Accounting and Auditing, University of Economics and Law, VNU-HCM, Ho Chi Minh City 700000, Vietnam)

Abstract

Although the relationship between board gender diversity and a firm’s financial performance has been investigated before, the current study provides a valuable contribution by exploring the complex phenomenon of the mediating impact of corporate social responsibility (CSR) performance on a firm’s financial performance. The current study aims to explore whether corporate social responsibility (represented by the proxy variable of CSR reporting) mediates the relationship between boardroom gender diversity and firm performance. We use the pooled ordinary least square (OLS) regression to examine the above relationship by using data from 2008 to 2015. To control the likelihood of endogeneity we also use one-year lagged and two-stage least square (2SLS) regression models. Our results show that boardroom gender diversity is significant, positively correlated with firm performance, and CSR fully mediates the relationship between boardroom gender diversity and firm performance. In addition, four control variables (independent director, Chief executive officer (CEO power), board member meeting frequency, Big4, and leverage) have some influence on firm performance. These findings hold for a set of robustness tests. Our findings have the implication for the investors and regulators. For investors, our results show that the existence of female directors on the board can improve the firm performance. For regulators, our results advise the worldwide policy maker to give the importance to boardroom gender diversity. The paper contributes to the existing studies, by pioneering the investigations of the mediating role of CSR in the relation between boardroom gender diversity and firm performance in Chinese context.

Suggested Citation

  • Muhammad Safdar Sial & Chunmei Zheng & Jacob Cherian & M.A. Gulzar & Phung Anh Thu & Tehmina Khan & Nguyen Vinh Khuong, 2018. "Does Corporate Social Responsibility Mediate the Relation between Boardroom Gender Diversity and Firm Performance of Chinese Listed Companies?," Sustainability, MDPI, vol. 10(10), pages 1-18, October.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3591-:d:174422
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