Board gender diversity and ESG performance in MENA countries: the moderating effect of culture

Abstract

This article investigates the impact of BGD on environmental, social and governance (ESG) performance, with a particular focus on how national culture moderates this relationship. The study relies on a sample of 95 firms across 10 MENA countries, covering the period from 2016 to 2021. We perform our analysis using the OLS method. We then apply the 2SLS approach to control for any endogeneity bias. We revealed that board gender diversity positively and significantly affects ESG performance in the MENA region. Moreover, national culture dimensions play a crucial moderating role. Particularly, we demonstrated a negative moderating effect of masculinity and a positive moderating effect of uncertainty avoidance and individualism on the relationship. Our findings are robust when employing alternative measures and after controlling for endogeneity. No previous study has explored the critical link between board gender diversity and ESG performance in the MENA region. Therefore, our insights carry significant contributions for policymakers, business leaders and researchers seeking to improve and strengthen ESG performance based on the specificities of gender diversity, particularly within the distinct cultural context of the MENA region.