Female CEOs and firm innovation in low- middle-income countries: An empirical analysis

Innovation is a critical driver of economic growth, yet the role of top executive characteristics particularly CEO gender in fostering innovation remains under-explored in developing country contexts. This study examines whether firms led by female CEOs in low- and middle-income countries are more likely to pursue innovative activities. Using firm-level data from the World Bank’s Enterprise Surveys and a logistic regression framework, we analyze the impact of CEO gender on the likelihood of firm innovation (product or process introduction), controlling for research and development (R&D) activity, firm size, ownership structure, and industry sector. The results provide evidence that female-led firms have a significantly higher probability of innovating compared to male-led firms, even after accounting for key covariates. Notably, the marginal effect of having a female CEO is positive, implying that female leadership adds about 5–10 percentage points to the predicted probability of innovation, holding other factors constant. Robustness checks, including goodness-of-fit tests and multicollinearity diagnostics, support the validity of the findings. These findings align with Upper Echelons Theory, suggesting that top executives’ characteristics shape organizational outcomes. The study contributes to the literature on gender diversity and innovation by highlighting how female CEOs can influence firm innovation in emerging economies. It also underscores the importance of supportive institutional frameworks—such as inclusive corporate cultures and pro-diversity policies—in amplifying the innovation benefits of female leadership. Our analysis suggests that empowering more women to reach executive roles could be a catalyst for innovation-led growth in developing economies.