Green innovation as a confluence for environmental performance and productivity is proving a long-term competitive advantage for firms (Castellacci and Lie, 2017). The outset of this concept entails product and process innovation with relatively less environmental hazards while using natural resources (Bartlett and Trifilova, 2010).

The environmental regulations have been increased in the recent promulgation of global concerns regarding climate change, which has increased the liabilities of firms in the form of regulatory compliance (Bansal and Clelland, 2004). The liabilities entice pressures that are reported to be influencing the outline of competitive advantage while promoting environment-friendly investments on top of the agenda of boards in the purview of sustainability (Chang et al., 2011). Stakeholders’ pressure has also pressed the firms to operate in an environment-friendly manner and integrate green practices into the firms’ products and processes (Kawai et al., 2018). The corporate sector has responded to these pressures through different interventions whereby green innovations have received high appreciation in the triage for long-term competitive advantage and sustainability (Chu et al., 2018).

Production/service innovation imperatively requires the consideration of consumer preferences for its success; therefore, the “Going greener” reflection needs to be converged with the dominion of the consumers in the case of green product/service innovations. On the other hand, process innovation concerns modification in the complete production process (Reichstein and Salter, 2006), and therefore, the “Going greener” reflection needs to be embedded in the entire modification milieu. As a second-order innovation activity, process innovation seems to be an unattractive activity; however, it fosters a long-term competitive advantage for a firm due to its inimitable nature (Pisano and Shih, 2012). The “Going greener” reflection necessitates the transformation of management conviction, organizational design, and production modus operandi, which entails an open and collaborative working environment (Ramos et al., 2018).

Women are contended to raise the deliberation of environmental issues on corporate boards amid their benevolence and empathy (Post et al., 2011); therefore, BGD can be termed as an important CG construct in terms of green innovation (GI) activities (Xu et al., 2020). Also, the leadership style of women is a participative one, which potentially kindles increased information exchange in BOD discussions (Adams and Ferreira, 2009) and may upgrade the effectiveness of the strategic changes required for green innovations. It has been reported that women are more heady concering “Community Influentials” (directors with enhanced sustainability and ecological orientation) than the male members of BODs (Rehbein et al., 2013).

Moreover, the stakeholders’ engagement requires a communal acumen and relationship sensitivity, which are the traits being attributed to women in the extant literature on strategic management and corporate governance (Hillman et al., 2000; Robinson and Lipman-Blumen, 2003; Nielsen and Huse, 2010). In tandem with reasoning, Post and Byron (2015) have reported the positive association of BGD with the BOD’s enhanced strategic consideration of environmental and sustainability concerns. In an environment of uncertainty, the perceptive skills of women on board are also contended to be efficient in the triage among different stakeholders (Naveed et al., 2021). The efficiency of women on board in the trade-off between stakeholders’ value and interest has been reported in the empirical studies of Miller and del Carmen Triana (2009) and of Kim and Starks (2016). Keeping in view the aforementioned argumentation, we hypothesize our first hypothesis as follows:

The antecedents of green innovation are clustered into three categories in the extant literature: (a) contextual factors, mainly referring to various external pressures, such as social norms, regulation, and stakeholder pressure; (b) firm-level characteristics, such as firm size and corporate financial performance; and (c) internal factors, which mainly refer to the individuals’ characteristics on a board.

CSRD is a powerful tool that informs relevant stakeholders about the social and environmental activities of firms (García-Sánchez et al., 2019) while premising the existence of the firm associated with the prerogative of the society, instead of an inherent right of the firm itself (Deegan, 2002). Also, the CSRD quality confirms the privilege of the political legitimacy to firms required for their successful business operations (Rauf et al., 2021b). Moreover, the CSRD quality ascertains the compliance of firms toward their social responsibility in terms of global standards (Chen et al., 2016) and is reported for significant association with the confidence of investors, information asymmetry, and betterment in repute (Cho and Patten, 2013).

Pertaining to green innovations, the quality of CSRD is contended to affect it through the amelioration of agency problems and through the formal and informal institutional isomorphism. When information asymmetry is alleviated in case of good-quality CSRDs, it increases the monitoring role of controllers in the purview of the principal–agent dilemma (Wang et al., 2016). Aghion et al. (2013) have described this incentive for innovation from the perspective of a career concern model. The Porter hypothesis regarding incentivization of innovation, in the premise of BGD, also fosters stimulation of green innovation. Therefore, we hypothesize our second hypothesis as follows:

As stated earlier, the studies concerning BGD and green constructs have mixed results whereby different external and internal factors are being identified in different studies for these differing results. Galbreath (2011) has inferred that amid the stereotyping of women as an inefficient entity for the bottom line, the masculine discourse prevails on the boards, and the sway of women is undermined in due process. Cumming and Leung (2021) have inferred different organizational fields of institutional theory, which entices normative, coercive, and mimetic pressures on the environmental sustainability initiatives and their dependence on BGD.

Triana et al. (2014) have termed BGD as a double-edged sword that can either improve or hinder the strategic development of a firm’s green innovation, depending upon the sway and alignment of women on boards. Kochan et al. (2003) have shown that mere number-based BGD may not suffice to improve a firm’s environmental performance, but to reap the fruits of BGD, a holistic view of the BGD needs to be considered in terms of the internal and external characteristics of a firm. Post and Byron (2015) in their meta-analysis relying on the upper echelons theory found that the relationship between gender diversity and firm performance varies by firms’ normative and sociocultural contexts, whereby the relationship is positive in the context of greater gender parity and negative in the context of low gender parity.

As CSRD has been considered an effective tool of legitimization for firms (Muñoz-Torres et al., 2013), its quality will potentially cater to the shocks which shape the differing and mixed results of the BGD–GI relationship. Ayers (2014) has ascertained that disseminating quality disclosures to the stakeholders institutes social resilience within the firm, which leverages it with the perceived organizational legitimacy and shields it from market volatility. In such a case, the firm may be in a better position to withstand the deprived performance ensuing events beyond the firm’s control like exogenous shocks and non-market factors. The quality of CSRD had been considered as an outcome variable in its earlier phase (Boin and Van Eeten, 2013); however, in the extant literature, it has been considered as a process variable which contributes to the dynamic capabilities of a firm to cope with adverse events proactively (Wegener et al., 2019).

In the perspective of the role congruence theory, Amore et al. (2014) have reported the influence of the organizational environment on women’s performance and have fostered that, in order to utilize women’s full potential, one has to tackle the hampering factors which encumber women to attain it. A firm with better CSRD quality fosters that it values the social and communal responsibility at par, and therefore, the communal behavior and gender-specific social performance of women would not be misperceived. It potentially excludes the role incongruity for women on boards and hence leverages a better enabling environment for BGD to contribute to the GI.

Given the constraining factors in the relationship between BGD and GI, quality CSRD has the potential to compensate for them in the purview of role congruence and social resilience theories and instill an enabling context for the positive role of female directors in the GI.

We collected data from A-share Chinese companies listed on the Shanghai and Shenzhen stock exchanges spanning between 2010 and 2019, except for financial institutions. All of the data were acquired from the Chinese Stock Exchange and the Accounting Research Database (CSMAR), which is the major source of information for Chinese-listed companies. CSR information was obtained manually. We excluded companies and years for which information on a particular dataset was unreachable. Hence, we acquired 3,736 firm-year observations after removing the missing observations.

Survey questionnaire has been traditionally used for the measurement of green innovation and its performance; however, they have inbuilt self-reporting bias and endogeneity issues (Song et al., 2019). In this study, GIP is used as a dependent variable. The keywords used for evaluating the patents are (1) Green, (2) Environmental, (3) Low carbon, (4) Sustainable, (5) Ecology, (6) Energy-saving, (7) Saving, (8) Clean, (9) Recycling, and (10) Environmental protection (Li et al., 2018; Hong et al., 2020). In this research, the quantity of green patents denotes GIP.

We examined board diversity on gender using Blau’s index (Blau, 1977). Gender diversity is measured by the absolute value of the difference between 0.5 and the proportion of female directors (gender diversity) (gender diversity = 1 – (pct women workers)² – (pct men workers)²). The resulting variable ranges from 0 to 0.5, with a higher value indicating greater gender diversity. As a robustness check, we replaced Blau’s index with the percent of female directors on board (Naveed et al., 2021). The percent of women on board and Blau’s index are highly correlated (cor = 0.8), and the resulting models are substantively similar.

Corporate social responsibility disclosure and its strategies have been discussed in past research (Tan et al., 2016; Hu et al., 2019; Rauf et al., 2021b). CSRD is typically explained in terms of a firm’s operating method in acquiring information and compliance with the standard guidelines. This study selects the scenarios of corporate responsibility information from 11 features listed in the “Important information from listed corporations’ CSRD reports” in the CSMAR to quantify the quality of firms’ social responsibility information. The 11 factors can be classified as follows: (1) how the disclosure refers to the Global Reporting Program’s “Sustainability reporting rules”; (2) if this report reveals the relief of shareholders’ needs and privileges; (3) whether this report discloses the security of debtors’ legitimate interests; (4) if it discloses the relief of workers’ rights and dignity; (5) if it discloses the prevention of providers’ needs and interests; (6) if it discloses the protection of clients’ and buyers’ rights and privileges; (7) if it discloses sustainable environmental growth; (8) whether or not something is disclosed regarding the community connections and social welfare commitments; (9) whether the development of a social responsibility framework and anticipated results has been reported or not; (10) if it discloses the components of security manufacturing, and lastly (11) if it discloses the deficiencies of the firm in terms of reporting. Social responsibility disclosure information in the 11 factors has been allocated with a value of 0 for no and a value of 1 for yes. As an outcome, the range of CSR is [0, 11]. Following that, the value of QCSRD is determined by dividing the scores of dissimilar firms by a total of 11 points (Rauf et al., 2021a).

The descriptive statistics of the critical variables are presented in Table 1. GIP has an average value of 10.349. BGD and QCSRD have mean values of 0.207, and 5.928, respectively. In addition, QCSRD is significantly and positively correlated with the GIP. Hence, it is evident that QCSRD is a moderator in the contexts of GIP and BGD. Table 2 shows the correlation among all explanatory variables, including control variables.

The correlation coefficients of the primary variable’s results are presented in Table 2. The results show that the consistency of GIP and BGD is at a 1% level, and the consistency of QCSRD is at a 5% level. Hence, it can be understood that green innovation and BGD have a positive and significant association with moderating QCSRD, which also shows consistency at the 1% stage within univariate influencing factors. All correlation analyses are below 0.70, suggesting that the maximum correlation among all variables does not increase by 0.50. As a consequence, no multicollinearity problem can have a severe influence on our findings. The correlation coefficient of variance inflation factors (VIFs) is 0.485, indicating no collinearity between variables.

Table 3 presents least square dummy variable (LSDV) regression results of Equations (1–3). Hypothesis (1) suggests that the board gender diversity has a direct relationship with the green innovation performance of the firm. Model (1), depicting the first hypothesis (H1), shows that BGD is significantly and positively associated with a firm’s GIP (β = 3.4184, p < 0.05), which is also in line with the research of Bajic and Yurtoglu (2018). Model 1 was re-estimated through the second measure of BGD in terms of the percentage of women on board, and the results remain positive and significant, depicting the robustness of the study (β = 2.9940, p < 0.1).

Hypothesis (2) suggests that the quality of corporate social responsibility disclosure has a direct relationship with green innovation performance of a firm. Model (2), depicting the second hypothesis (H2), shows that QCSRD positively impacts GIP (β = 0.3555, p < 0.01).

Hypothesis (3) suggests that the quality of corporate social responsibility disclosure has a moderating effect on the direct relationship between board gender diversity and green innovation performance of a firm. Following Aiken and West (1991), the moderation term was inculcated in the last model after the investigation of the direct effects. Model 3’s results depict that the coefficient for the interaction term (BGD x CSRD) is positive and significant (β = 1.1914, p < 0.01), proving hypothesis 3, which is in line with the research of J. Xu et al. (2020). Model 3 was re-evaluated on the second measure of BGD in terms of the percentage of female directors on board, and the results depict the robustness of the study as the coefficient remains significant and positive (β = 0.9232, p < 0.1).

Following Becker’s (2005) research, the control variable, namely absorptive capacity, which has no significant effect on the GIP, was purged from the original model in order to optimize the model for better fit and efficiency.

To check for the endogeneity problem, we employed two alternative models: a one-year lag measure of BGD and QCRD 2SLS regression as instrumental variables, which shows that the results are robust (Table 4), and a generalized method of moments for the endogeneity check, the results of which are also shown in Table 4.

First, the study expands the existing theoretical purview by explicating firms’ existence in the perspective of the prerogatives of the society. For instance, existing research theorizes the BGD–GIP relationship in terms of internal factors, contextual factors, and institutional settings in which the firms operate. Both the legitimacy and stakeholder theories describe the relationship as a response to the enticed pressures from these factors through a resource-based view. In extension to this view, a remarkable point of the current study is that it asserts the role congruence of women on board in terms of a conducive environment for women’s gender-specific performance (Amore et al., 2014). Role congruence complements the resource base for the optimized capability of the firm, on the one hand, and tackles the hampering factors restraining women to deliver at their full potential, on the other hand, so as to address the demands regarding the “Going greener” initiatives and innovations (Triana et al., 2014; Vial et al., 2016).

A firm with better CSRD is an indicator that the firm values the societal prerogative of a firm, and therefore, the communal conduct and gender-specific performance of women would not be misconstrued. It excludes the role incongruity for women on boards while leveraging a better enabling environment for BGD to contribute to the GI. Thus, the first input to the theory regarding the BGD–GIP relationship is that accounting for internal, contextual, and institutional pressures does not suffice for the complete description of the phenomenon. More indicatively, the better quality of CSRD encompasses the amelioration of an enabling environment for the relationship and mitigating the constraining factors whatsoever.

Second, while the quality of CSRD can indicate the role congruence of women on board for their full potential delivery, there may be unexpected exogenous shocks that hamper the green innovation performance and alter the BGD–GIP relationship. The current study has built the premise of organizational resilience on the propositions of Ayers (2014) and Wegener et al. (2019). Ayers (2014) has argued the social resilience of an organization in terms of the quality of CSRD for market volatility, while Wegener et al. (2019) have considered it as an outcome of the dynamic capabilities of a firm. The findings of the current study profess the moderating role of the quality of CSRD in terms of organizational resilience to cope with these shocks. Quality CSRD, a dynamic capability and a tool of legitimization of a firm, would leverage the organizational resilience and catre to the shocks which shape the differing and mixed results of the BGD–GI relationship (Muñoz-Torres et al., 2013).

Managers attempting to improve green innovation performance may consider BGD in the purview of the quality of CSRD. According to this study, higher levels of CSR information may boost the impact of BGD on corporate GIP performance, which has important practical implications for practitioners looking for corporate GIP. The role of CSRD may be considered as an indicator of the conduciveness for the stand-alone version of GIP and also the BGD-leveraged GIP. The outcomes of this research enable the firms to engage in CSR strategies that deliver green signals to internal and external stakeholders, resulting in green outcomes. Therefore, business executives need to focus on the interplay between QCSRD, BGD, and GIP so as to provide the underpinning for the amelioration of green innovation performance of a firm. This study also underscores the need for highlighting the quality performance of a firm in terms of CSRD to garner legitimacy for itself and also disseminate the signal of green compliance to the relevant stakeholders.

At the policy level, the government also needs to support the firms in order to encourage them to improve their quality in terms of CSRD and disclose it vehemently. This will ease their capital financing, and they will be able to attract green finance. To assure the authority of CSR rating conclusions, the government should establish a supervisory mechanism and share CSR information with environmental protection departments while mandating it as a criterion for qualification for the corporate GIP subsidy.