This study examines the impact of female executives on corporate environmental, social and governance (ESG) performance within Chinese-listed companies. Utilizing firm-level data from 2015 to 2022, this study investigates how gender diversity in leadership drives ESG outcomes. Furthermore, it examines the heterogeneous effects of ownership types, financial constraints and regional development levels, providing evidence-based insights into the strategic role of women in executive positions in advancing corporate sustainability and informing governance reforms for inclusive business practices.
The study employs a dual fixed-effects regression model to analyze panel data from Chinese-listed companies. Beyond investigating the direct impact of female executives on ESG performance, the model incorporates financial constraints as a moderating variable. Sub-sample analyses are conducted to explore heterogeneity across ownership types (state-owned and private) and regional economic development (eastern, central and western China), offering a nuanced understanding of contextual factors shaping the relationship between gender diversity in leadership and corporate sustainability outcomes.
The empirical results reveal that a 10% increase in female executive representation significantly enhances corporate ESG scores by 0.1939 points. This effect is particularly pronounced in state-owned enterprises (SOEs) exhibiting the most pronounced effect. Moreover, the results indicate that reduced financial constraints amplify the positive association between female executives and ESG performance. Regional disparities reveal that female executives significantly drive ESG improvements in economically developed eastern region of China, whereas no statistically meaningful impact is observed in underdeveloped central and western regions.
The findings suggest that corporations should institutionalize gender-inclusive recruitment and promotion systems to strengthen female decision-making authority. Policymakers are encouraged to adopt region-specific strategies, such as incentivizing gender parity in underdeveloped areas to mitigate ESG governance gaps. Furthermore, SOE reforms could integrate gender diversity metrics into ESG evaluation frameworks to catalyze industry-wide sustainability practices. Finally, financial institutions could develop green financing instruments offering preferential terms to firms achieving gender-balanced leadership thresholds.
This study expands to the reservoir of literature on gender diversity and sustainability by providing empirical evidence from an emerging market where ESG disclosure is evolving. It is among the pioneer studies to quantify the marginal effect of female executives’ representation on ESG performance and to reveal how this relationship is influenced by financial constraints, ownership structure and regional disparities. The study underscores the strategic value of female executives in fostering inclusive governance and regionally balanced sustainable development.
