Board Gender Diversity and Firm Financial Performance: The Role of Innovation

Abstract: This quantitative study investigates the inter-relationship between board gender diversity, innovation, and subsequent firm financial performance. We use two multivariate OLS regression models on an unbalanced panel dataset with firm-year observations for listed companies headquartered in the U.S. between 2012-2019. In contrast to most previous research, our study fails to find significant statistical evidence in support of a positive relationship between board gender diversity and firm financial performance. Further, neither innovation intensity in companies, nor relative innovation importance in industries, respectively, can be concluded to have an impact on said relationship. While we cannot find support for our hypotheses, our study further discusses the difficulty in measuring the interaction effect between innovation and board gender diversity on subsequent firm financial performance - ultimately contributing to the disentanglement of a vastly ambiguous field of research.