Does board gender diversity moderate the impact of ESG on firms' economic value added? Evidence from an emerging economy

Abstract

Purpose

This study explores the moderating effect of board gender diversity (BGD) between a firm's Environmental, Social, and Governance (ESG) performance and Economic value added (EVA) using NSE-listed 331 companies' data from 2015 to 2020, forming 1986 firm-year observations.

Design/methodology/approach

Our study is based on panel data; hence, we use a system GMM panel regression model to confirm whether the BGD moderates ESG and EVA. We also address the endogeneity issues.

Findings

Overall, our study reported a positive moderating effect of BGD between ESG and EVA. Similar results were observed across the chemical and financial services industries. However, in the case of the healthcare and consumer goods industries, we did not find support for the moderating effect.

Practical implications

The implications of our results are considerable and relevant for regulators, governing bodies, and corporate managers. It helps them understand how BGD plays a vital role in influencing the effect of ESG on a firm's EVA.

Originality/value

No existing research has explored the moderating effect of BGD between ESG and EVA, to the authors' best knowledge. Therefore, our study extends the existing literature and further supports resource dependency, agency, and stakeholder theories of corporate governance.

Citation

Makhija, H., Raghukumari, P.S. and Sethiya, A. (2025), "Does board gender diversity moderate the impact of ESG on firms' economic value added? Evidence from an emerging economy", International Journal of Productivity and Performance Management, Vol. 74 No. 3, pp. 819-840. https://doi.org/10.1108/IJPPM-12-2023-0664