Institutional ownership and corporate environmental innovation: the moderating role of board gender diversity

Purpose This study aims to examine the differential impacts of long-term strategic investors (LSIs) and short-term opportunistic investors (SOIs) on corporate environmental innovation (EI) in China A-share listed companies, considering the role of board gender diversity (BGD). Design/methodology/approach This study categorizes institutional investors into LSIs and SOIs using a panel dataset spanning 2013 to 2022 from China’s A-share market. To better capture the nature of firms’ EI performance, we disaggregate EI into invention and utility patent types, thereby assessing the specific directions of environmental contributions influenced by these investor groups. BGD is quantified using the Blau index to reflect the gender heterogeneity among board members. To address potential endogeneity and ensure the robustness of our findings, we further employ a two-step system generalized method of moments estimation approach. Findings We find that LSIs have a positive and significant influence on all types of EI outcomes, reinforcing their role in driving sustainable innovation. In contrast, SOIs tend to exert a negative effect, often discouraging such efforts. Furthermore, BGD significantly moderates these relationships – enhancing the positive effect of LSIs while mitigating the adverse impact of SOIs to a certain extent. Originality/value This study combines stakeholder theory and upper echelons theory to explore how BGD influences the environmental strategies driven by different types of institutional investors, offering new perspectives within an emerging context.