Board gender diversity and firm performance: The moderating role of firm size

• Author: Peng Chen,Haishan Li
• DOI: http://doi.org/10.1111/beer.12188
• Published date: 01 October 2018
• Date: 01 October 2018

SPECIAL ISSUE

Board gender diversity and firm performance: The moderating

role of firm size

Haishan Li

1

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Peng Chen

2,3

1

School of Shipping Economics and Trade, GuangzhouMaritime University, Guangzhou, China

2

Department of Finance and Institute of Finance, Jinan University, Guangzhou, China

3

School of Business and Economics, Loughborough University, Leicestershire,United Kingdom

Correspondence

Peng Chen, Department of Finance and

Institute of Finance, Jinan University,

Guangzhou 510632, China.

Email: rocchan21@gmail.com

Funding information

Fundamental Research Funds for the

Central Universities, Grant/Award Number:

15JNQM009; Natural Science Foundation

of Guangdong Province, Grant/Award

Number: 2015A030310444; Social

Sciences Funding Program of Guangdong

Province, Grant/Award Number:

GD14XYJ03; Department of Education of

Guangdong Province, Grant/Award

Number: 2015WQNCX115; Guangzhou

Maritime University, Grant/Award Number:

B330404

This paper investigates the relationships among board genderdiversity, firm performance, and firm

size. Our paper provides new insights into the relationship between board gender diversity and

firm performance by examining whether firm size alters the impact of board gender diversity on

firm performance.We use a panel data from A-share-listed non-financialfirms in China to examine

the relationshipduring the period of 2007–2012. Our finding demonstratesthat the gender diver-

sity on the board has a positive impact on firm performance if and only if the value of firm size is

less than some critical value. In addition, we also find that firm size may undermine the positive

impact of board gender diversity on firm performance. This paper contributes to the literature by

offering a contingency approach to examine the relationship between board gender diversity and

firm performance as well as shedding light on the relationship in the context of a developing

economy.

1

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INTRODUCTION

Over the recent decades, the issue of gender diversity on the board

has risen in importance (Adams & Ferreira, 2009; Catalyst, 2004;

Eisenberg, Sundgren, & Wells, 1998; EuropeanCommission, 2012; Lee,

Marshall, Rallis, & Moscardi, 2015). Australia, Belgium, France,

Germany, Iceland, Italy, Norway, and Spain, for example, have passed

legislation mandating female board representation (Chapple &

Humphrey, 2012). The debate as to whether gender diversity on the

board is reflected in improved firm performance is heavily discussed

for the enterprises in developed countries, such as the United States

(Adams & Ferreira, 2009; Carter, Simkins, & Simpson, 2003; Carter

et al., 2010; Conyon & He, 2017) or European countries (Arun,

Almahrog, & Aribi, 2015; Campbell & Mínguez-Vera, 2008; Isidro &

Sobral, 2015; L€

uckerath-Rovers, 2013; Reguera-Alvarado, de Fuentes,

& Laffarga, 2015). However, the empirical findingson this issue appear

rather ambiguous and contradictory. While some studies suggest firm

performance benefits from gender diversity at board level (e.g., Camp-

bell & Mínguez-Vera, 2008; Kim & Starks, 2016; Post & Byron, 2015),

some studies suggest not (e.g., Carteret al., 2010; Randøy, Thomsen, &

Oxelheim, 2006), and some other studies provide evidence of a nega-

tive link (e.g., Adams & Ferreira, 2009; Terjesen, Couto, & Francisco,

2016). The results of the impact vary greatly due to the data from dif-

ferent countries, time periods, or measures of firm performance

(Joecks, Pull,& Vetter, 2013).

As a consequence, researchers suggest that moderating or inter-

vening variables between gender diversity and firm performance must

be examined to uncoverwhether and how gender diversity affectsfirm

performance (Kochan et al., 2003; Miller & del Carmen Triana, 2009).

From the perspective of a contingency approach, Boyd, Haynes, and

Zona (2011) argue that the impact of board characteristics may be

enhanced or restricted depending on the organizational contexts. In

fact, a number of different aspects of organizational environment may

moderate the relationship between board gender diversity and firm

performance (Dwyer, Richard, & Chadwick,2003; Kochan et al., 2003),

such as organizational culture and growth orientation (Dwyer et al.,

2003), task requirements (Van Knippenberg, De Dreu, & Homan,

2004), participative strategy making (Richard, Kirby, & Chadwick,

2013), and exportdependence (Solakoglu & Demir, 2016).For example,

Van Knippenberg et al. (2004) argue that researchers should include

Received:13 October 2016

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Revised: 5 June 2017

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Accepted:12 April2018

DOI: 10.1111/beer.12188

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  wileyonlinelibrary.com/journal/beer Business Ethics: A Eur Rev. 2018;27:294–308.

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