Female leadership and corporate carbon emissions: Economic mechanisms and institutional contingencies

This paper examines the economic relationship between gender diversity in corporate leadership and environmental performance using evidence from China. We first document substantial gender differences in environmental preferences, with female respondents exhibiting significantly stronger preferences for environmental protection relative to economic growth. We then analyze whether these individual-level preference differences aggregate to influence firm-level outcomes using panel data from Chinese listed firms over 2008–2022. Employing two-way fixed effects models, we find that greater female representation in management is associated with lower carbon emissions and higher ESG scores. These effects are economically meaningful and robust to alternative specifications. Critically, the relationship exhibits substantial temporal heterogeneity, becoming statistically and economically significant only after the 2015 Paris Agreement, suggesting that female managers’ environmental preferences translate into corporate action primarily when institutional pressures make environmental performance economically consequential. Our findings contribute to understanding how heterogeneous managerial preferences influence corporate externalities and have implications for corporate governance policy, environmental regulation design, and investor portfolio construction in the context of climate transition. The results suggest that board gender diversity may generate positive environmental externalities without destroying shareholder value, particularly in institutional environments with strong climate governance.