Gender Diversity and Environmental Innovation: The Role of Stakeholder Strategy and Analyst Feedback

This paper examines the effect of strategic leadership team’s gender diversity on environmental innovations. Drawing upon theories from strategic leadership and gender diversity literatures, we argue that TMT and board gender diversity collectively and separately promotes environmental innovations. We also examine the pathways through which gender diversity of strategic leaders influence environmental innovations. Using an unbalanced panel data of 8,403 observations for 1,290 U.S. firms for the period 2011-2021, with dynamic panel generalized method of moment regressions, we find that gender diversity in strategic leadership teams leads to higher environmental innovations. This relationship is mediated via improved CSR strategy response and moderated via external feedback from stock market analyst recommendations. In contrast to our hypothesis, the joined interactive effect of BoD and TMT diversity was found to have a small but significant negative effect on environmental innovations, suggesting a rather complex process through which the impact of diversity across levels of strategic leadership unfolds. We discuss the results and provide future research directions.