Financial and gender diversity influences on firm value and performance: a PCA–system GMM study of women-led firms

Purpose This study examines the joint influence of financial indicators and gender diversity determinants on firm value and performance in women-led enterprises, addressing the fragmented treatment of these factors in prior research. Design/methodology/approach Grounded in the Stakeholder and Agency Theory, the study analyzes the influence of financial and gender diversity variables by constructing three composite indices using the Principal Component Analysis (PCA). A dynamic System GMM model is employed on a comprehensive panel dataset of 251 women-led enterprises from CMIE covering the period 2014–2023 to address endogeneity and performance persistence. Findings The results indicate that financial capacity and efficiency are primary drivers of firm performance, while gender diversity strengthens monitoring, long-term stability and stakeholder alignment. The integrated effects highlight the complementary governance – finance mechanisms shaping firm value and performance. Practical implications The findings provide actionable insights for investors, policymakers and other stakeholders, aiming to strengthen financial resilience and governance effectiveness by supporting the development of strategies that improve firm performance while mitigating associated risks in women-led enterprises. Originality/value By integrating PCA derived financial indicators with governance variables in a dynamic panel model, this study employs a unified analytical framework to explain firm value and performance in women-led enterprises, addressing the traditionally fragmented approach in prior research.