Board gender diversity and the financial performance of Pakistani non‐financial firms: A fuzzy‐set QCA approach

• Published date: 01 April 2023
• Author: Farah Naz,Tooba Lutfullah,Sadia Arshad,Muhammad Ishfaq Ahmad,Joe Ueng
• Date: 01 April 2023
• DOI: http://doi.org/10.1002/jcaf.22607

Received:  November  Accepted:  December 

DOI: ./jcaf.

RESEARCH ARTICLE

Board gender diversity and the financial performance of

Pakistani non-financial firms: A fuzzy-set QCA approach

Farah Naz1Tooba Lutfullah1Sadia Arshad2Muhammad Ishfaq Ahmad3

Joe Ueng4

Department of Accounting and Finance,

Kinnaird College for Women Lahore,

Pakistan

Department of Business Studies,

Kinnaird College for Women Lahore,

Pakistan

Lahore Business School, The University

of Lahore, Lahore, Pakistan

Department of Economics and Finance,

Cameron School of Business, University

of St. Thomas, Houston, USA

Correspondence

Joe Ueng, Department of Economics and

Finance, Cameron School of Business,

University of St. Thomas, Houston, USA.

Email: ueng@stthom.edu

Abstract

According to the upper echelon’stheory, the decision-making process in regardto

competitive strategies by the top management has an enduring impact on firm

performance (Hambrick & Mason, ). Moreover, the attributes of the indi-

viduals in top management may also affect the decision-making process. The

purpose of this research is to analyze the board gender diversity impact on the

financial performance of the non-financial companies of Pakistan. Qualitative

comparative analysis (QCA) is employed which is premised on Boolean algebra

that sets foundation for the theoretical framework of complexitytheory. The sam-

ple comprises of  non-financial firms listed on the KSE- Index. The results

are modelled as a component of the intermediate solutions with board- level vari-

ables and gender diversity for the outcome variable (i.e., EVA and Tobin’s Q).

From board level variables, the impact of gender diversity and foreign directors

is identified among most of the combinations whereas leverage is the prominent

variable within the firm level variables, the boards of which tend to be small.

The results showed a heterogeneous nature of response as board gender diver-

sity exhibited stronger association in some configurations and in some cases it

exhibited weaker association similar to that of (Pandey et al., ).

Originality: This study is an attempt to explore the of board gender diversity role

in a firm’s performance using board level and firm level variables. Therefore,this

work adds to the prior research by adding a complementarity-based methodology

for analyzing board gender diversity.

KEYWORDS

board gender diversity, Tobin’sQ, qualitative comparative analysis, EVA, firm performance

1 INTRODUCTION

Corporate Governance a term has versatile meaning and

defined by the researchers in a different way which indi-

cates an important role for the firm’s sustainability and

sustainability. It plays a vital role in facing challenges

and deals with the protection of the investors with the

effectiveness of board of directors evaluation, the board

composition and the corporate social responsibility of the

firms (Rahman et al., ; Shafique et al., ). The effec-

tiveness of the boards can be analyzed with the diverse

boardrooms which increase the decision making process

more effective and considered by corporate world for the

practical progress and sustainable business (Karim et al.,

258 ©  Wiley Periodicals LLC. J Corp Account Finance. ;:–.wileyonlinelibrary.com/journal/jcaf