Does Increased Representation of Female Executives Improve Corporate Environmental Investment? Evidence from China

Based on the upper echelon theory and theory of feminist care ethics, this paper uses the data of 359 Chinese listed companies between 2008-2016 to investigate the influence of female executives on corporate environmental investment. The results of the pooled OLS (Ordinary Least Square) regression reveals that both having a female as CEO or Chair as well as increased representation of female directors on the board committees significantly increases corporate environmental investment. Moreover, this phenomenon is not only evident in polluting enterprises but also exists in non-polluting enterprises. Further, we examine whether female executives' environmental investment is driven by the motive of availing government subsidies or to comply with the environmental regulations. The empirical testing reveals that the environmental investment by female executives is not associated with the acquisition of government subsidies. Moreover, female executives' environmental investment remains significant in China's eastern regions despite having less stringent government regulations. The study also found that contrary to the result in the male sample, environmental investment by the female executives significantly reduces pollutant emissions. The present study adds a new perspective to the CSR literature and suggests that an increase in environmental investment by the women executives lies primarily in their innate commitment towards social responsibility. Against the backdrop of a greater emphasis on environmental protection in China, it is concluded that increased representation of female executives in enterprises can contribute to a significant improvement in environmental quality.