Gendered leadership and market reactions to corporate environmental strategies: differentiation vs. conformity in emerging markets

Abstract Despite the growing importance of corporate environmental strategies (CES), limited attention has been paid to the dynamic interplay between emphasis differentiation—prioritizing unique environmental initiatives—and scope conformity—aligning with industry norms—and how the market evaluates this interplay within the CES context. Drawing on the literature on optimal distinctiveness and social role theory, this study examines how the market responds to firms’ CES emphasis differentiation and scope conformity, considering their prior strategic positioning and CEO gender. Specifically, we hypothesize that firms maintaining consistency in their CES practices (e.g., continuing to emphasize differentiation or conformity) are rewarded by the market, whereas strategic shifts (e.g., transitioning from emphasis differentiation to scope conformity, or vice versa) are penalized due to perceived uncertainty. Furthermore, firms led by female CEOs face heightened skepticism for both consistent and shifting strategies, reflecting gender biases in market evaluations. Using a dataset of Chinese publicly listed firms, our empirical findings support these hypotheses. This study contributes to the literature by emphasizing the critical role of consistency in CES practices for favorable market outcomes and revealing how gendered perceptions influence the evaluation of corporate environmental practices.