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Sustainable Governance and Green Innovation: A Perspective from Gender Diversity in China’s Listed Companies

Sustainable governance has become essential in corporate sustainable development. As female executives bring diversity to corporate governance, their impact on the corporate sustainability has attracted wide attention. Using the evidence from China’s listed companies in Shanghai and Shenzhen A-shares between 2010 and 2019, this paper examines the impact of gender diversity of executives on corporate green innovation. We find that the proportion of female executives has a significant negative impact on corporate green innovation. The results show: (1) Considering the heterogeneity of corporate risks, the negative impact of female executives on green innovation exists when the company is exposed to high risks, that is, in the subsample of firms with high risk-taking level and financial constraints; (2) considering the heterogeneity of corporate characteristics, female executives have a negative impact on green innovation in small non-state-owned companies with high separation of ownership and control; (3) considering the heterogeneity of industries, the effect of female executives on green innovation is significant in non-heavy pollution industries; (4) the mechanism test shows that patriarchy culture weakens the influence of female executives. In an environment where men are in power, the impact of female executives on green innovation is not significant; (5) taking the 2018 environmental fee-to-tax policy as a quasi-experiment, we find that female executives will instead promote corporate green innovation in areas where the environmental tax burden has increased significantly. The results imply that since corporate green innovation is a high-risk investment, female executives will make green innovation decisions more prudently based on corporate operating characteristics. This research provides a new perspective for understanding the role of female executives in corporate governance and corporate sustainable development.