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Female directors and corporate innovation in family firms in India. Do leverage ratios and mandatory CSR expenditure matter?

Kofi Mintah Oware (Department of Banking Technology and Finance, Kumasi Technical University, Kumasi, Ghana)
Kingsley Appiah (Department of Banking Technology and Finance, Kumasi Technical University, Kumasi, Ghana)

Journal of Global Responsibility

ISSN: 2041-2568

Article publication date: 21 December 2022

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Abstract

Purpose

Based on data collected using the purposive sampling technique extracted from a secondary data source, this paper aims to examine the relationship between female directors and firm innovation. The paper also examines the impact of leverage ratios and corporate social responsibility (CSR) expenditure on the association between female directors and firms’ innovation.

Design/methodology/approach

The feasible general least regression technique was applied to overcome potential endogeneity issues associated with female directors and corporate innovation spending.

Findings

With subsequent control of individual and firm variables, the first findings of this study indicate that female directors significantly decrease firms’ innovation spending. The second outcomes of this study show that the leverage ratio considerably improves corporate innovation spending. The third findings show that the leverage ratio positively moderates the association between female directors and corporate innovation spending. The fourth findings show that CSR expenditure significantly improves firm innovation spending but does not moderate the association between female directors and corporate innovation spending.

Research limitations/implications

Based on dependency theory, robust and reliable conclusions suggest that female directors’ engagement on the Indian board needs more than biological sex, that is, the required expertise. The paper also provides policy implications for female expertise in minority engagement on the board of listed firms in India, especially when the firm desires to increase its corporate innovation spending.

Originality/value

This study is among the first, to the best of the authors’ knowledge, to comment on mandatory CSR expenditure as an independent variable on innovation or a moderating variable between female directors and corporate innovation. Similarly, the family-controlled management perspective in this study deepens the debate on gender diversity and corporate innovation.

Keywords

Citation

Oware, K.M. and Appiah, K. (2022), "Female directors and corporate innovation in family firms in India. Do leverage ratios and mandatory CSR expenditure matter?", Journal of Global Responsibility, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JGR-05-2022-0047

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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