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Female CEOs and corporate innovation

Ronny Prabowo (Universitas Kristen Satya Wacana, Salatiga, Indonesia)
Doddy Setiawan (Universitas Sebelas Maret, Surakarta, Indonesia)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 4 March 2021

Issue publication date: 4 May 2021




We investigate the effect of female CEOs on corporate innovation using Indonesian companies. More specifically, this paper aims to answer the following research questions. First, do firms led by female CEOs innovate more or less than firms led by male CEOs? Second, does firm size positively moderate the effect of CEO gender on corporate innovation? Our research questions imply that female CEOs' innovative performance likely depends on the size of their firms.


Because the dependent variable is a dummy that equals one if the firm was an innovator and zero otherwise, this study employs probit analysis to test the hypotheses empirically. As an alternative test, we use a different measure of the dependent variable (INNOV-corporate innovation) by summing the firm's responses (yes/no) to nine innovation-related questions. Because this alternative measure of INNOV exhibits a count-data characteristic with non-negative integer values and more than 70% of the total sample did not engage in innovation activities at all, this study relies on the zero-inflated Poisson regression in the robustness test.


We have shown that firms led by female CEOs exhibit a greater probability of being innovators. Further, firm size increases the positive effect of female CEOs on firms' probability of engaging in innovation activities. Further, we also find that when female CEOs manage women-owned firms, their firms are more likely to engage in innovation activities.

Research limitations/implications

This study cannot further investigate the causal relationship between CEO gender and corporate innovation (e.g. by analyzing whether CEOs with different gender affects firm innovation) because it relies on the World Bank Enterprise Survey data. Nevertheless, this study suggests that stakeholders, especially in developing countries like Indonesia, need to encourage more women to hold CEO positions, especially in larger firms, because women-led firms perform better in innovation activities.


Our study thus highlights that female CEOs outperform their male counterparts in innovation activities. These results support the argument that because of gender-based discrimination that they receive, female CEOs are greatly motivated to exhibit greater innovation performance. Further, it is more difficult for women to hold the CEO positions in larger firms because of these firms' more intense managerial job market.



Prabowo, R. and Setiawan, D. (2021), "Female CEOs and corporate innovation", International Journal of Social Economics, Vol. 48 No. 5, pp. 709-723.



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