Do Women in Top Management Enhance Firm Financial Sustainability? Evidence from a Large Sample of Emerging Economies

Abstract

The fifth of the 17 Sustainable Development Goals (SDGs) included in the Sustainable Development Agenda is gender equality. Despite advances in recognizing women's contributions in many areas of life, society has yet to fully appreciate women's positions and influence in business. Financial sustainability, on the other hand, has attracted scholarly attention for several decades as a crucial condition for sustainable growth. Therefore, the present study investigates the influence of women in top management on business financial sustainability. It uses a sample of 55158 firms from 82 developing countries from 2015 to 2022, World Bank Enterprise surveys, in order to examine whether firms’ gender diversity influences financial sustainability. Findings document that firms with females’ top managers are financially more sustainable than their male-led counterparts. Results also indicate that the effect of female in top management on firm sustainability varies between regions. The study's findings give critical management and policy insights into corporate financial sustainability. Gender diversity should be considered by managers and policymakers as a strategy for firms to achieve financial sustainability and ultimately to contribute to the sustainable development agenda.