TY - JOUR
T1 - Female board representation and coupled open innovation
T2 - Evidence from emerging market multinational enterprises
AU - Adam, Kweku
AU - Attah-Boakye, Rexford
AU - Yu, Honglan
AU - Johansson , Jeaneth
AU - Tchouamou Njoya, Eric
N1 - Funding Information:
Institutions include both formal (i.e., laws, rights, corruption regulations, government efficiency and effectiveness) and informal institutions (i.e., gender parity, culture, codes of conduct, local norms). Both formal and informal institutions are created and maintained to ensure social stability (North, 1991). It is worth noting that the institutional environment can constrain but also enable organisations’ actions, such as innovation, knowledge transfer, and OI (DiMaggio and Powell, 1983; Adams et al., 2019). Due to its openness, sharing, and collaboration nature, OI requires informal institutional support, such as a collectivist culture that encourages sharing and community building and customer or user willingness to co-develop. The OI process and its improvement also need a set of formal institutional support (Caraça et al., 2009). Collaborated innovation project success often takes place in a qualified institutional environment where the virtuous circle of innovation is more likely to be sustained (Greco et al., 2017).The baseline logit regression and our robust two-steps system GMM results in Table 6 show a significant positive association between female board representation and coupled OI in both our model 1 (β = 0.374, p < 0.013) and model 2 – system GMM regression-two-step (β = 0.553, p < 0.005) respectively. (please refer to Table 6, the p-values represent the standard errors of the regression co-efficient). This shows that our findings are robust and consistent across the logistic regression model and our robust two-step system GMM. This result supported hypothesis 1 and is consistent with the underpinning argument of the UET that having more female board members can exert a sizable positive influence on coupled OI activities. Besides, our results agree with scores of studies contending that having more females on corporate boards increases divergent views which enhances creativity and innovation (e.g., Ain et al., 2021; Yarram and Adapa, 2021; Espig et al., 2021; He and Jiang, 2019; Nadeem et al., 2020; Attah-Boakye et al., 2022Attah‐Boakye et al., 2022). Our results, therefore, imply that encouraging more females to study science, technology, engineering and mathematics and supporting and promoting them into top positions will contribute significantly to corporate innovation and reduction in Co2 emissions (Le Loarne-Lemaire et al., 2021). Our study extends the literature by providing empirical evidence that is based on data collected from 183 EMNEs operating in 16 emerging economies. Our results imply that legislation that supports the promotion of more females to the board can positively influence OI activities.To analyse hypothesis 2a, we test how the control of corruption moderates the effect of female board representation on coupled OI using our baseline logit regression in model 1 and robust two-steps system GMM results in model 2 (please see Table 7). Our results revealed that control corruption positively moderates the effects between female board representation and coupled OI (please refer to Table 7, model 1: β = 0.113, p < 0.126). and model 2 – system GMM regression-two-step (β = 0.112, p < 0.129) respectively This finding supports hypothesis 2a. This finding also corroborates with previous empirical studies that contend that, unlike their male counterparts, female board members in the upper echelons are usually less likely to engage in corrupt practices (Xia et al., 2018). Additionally, empirical studies such as Lee et al. (2020) and Pirtea et al. (2019) contend that although country-level institutional quality plays a vital role in firm-level innovation, poor institutional quality such as corruption and poor governance has a significant negative effect on OI. Our results imply that having more female board members will not only lessen corrupt practices but also strengthen coupled OI.To test hypothesis 2c, we included the WPI (also sometimes referred to as gender parity index) in our corpus of variables. The purpose is to investigate if higher WPI moderates the positive association between female board representation and coupled OI. Our model 1 baseline logit regression results in Table 7 revealed that higher female board members combined with WPI have a significant positive effect on coupled OI (β = 0.442, p < 0.020). Similarly, this significant result is supported by our robust two steps system GMM in model 2 in Table 7 (β = 0.450, p < 0.020). These interesting findings are consistent with hypothesis 2c and other studies such as who argue that women parity, diversity, inclusion, and equity are essential for knowledge production and corporate innovation. Besides, WPI has long been the central focus for science, technology, engineering and mathematics (STEM) international network organisations aimed at supporting female STEM education in most emerging economies. Our study provides new and interesting insights into the role of female board members.Although corporate governance codes spreading around the world elevates the role of the board to a supervisory role, it also requires an understanding of the strategic direction of firms. The influence of corporate boards on the strategic decisions of firms has been well explored over the years (e.g., Carpenter and Westphal, 2001; Judge Jr and Zeithaml, 1992; Luciano et al., 2020). The involvement of the board of directors in strategic decisions (whether they occupy an executive position or NEDs) can be viewed as an institutional response or as a strategic adaptation to external pressures on the firm. Given the recent intensification of external regulatory pressures on corporate accountability, it is difficult to assume that non-executive or outside directors will engage in rubber stamping exercises by supporting OI initiatives that require huge long-term commitment and investments. Therefore, whilst the role of board members (especially females) may not be so straight, our data analysis extends the literature by evidencing an unequivocal linkage between the engagement of females on corporate boards and coupled OI. Using the WPI and quantile regressions strengthens our position on how female board representation, directly and indirectly, increased OI initiatives which seem to also enhance firm performance.
Publisher Copyright:
© 2023 The Authors
PY - 2023/6/1
Y1 - 2023/6/1
N2 - Little research has been done on female board representation in emerging market multinational enterprises (EMNEs). Our paper considers the role of female board representation and its impact on open innovation (OI) in the unique context of emerging markets. We draw on upper echelons and institutional theories to understand how female board representation and cross country institutional contexts influence coupled OI. Combining a 10-year (2009-2019) dataset with a rich in-depth content analysis of 183 (EMNEs) engaged in OI, our results reveal a significant positive association between female board representation and a firm’s commitment to coupled OI initiatives. We also find that country-level institutional factors affect and positively moderate the relationship between female board representation and coupled OI. In emerging market environments where managerial perception and cultural beliefs sometimes hinder the promotion of females into top positions, our work has implications for EMNEs regarding how they harness diversity. We contribute to the OI literature by showing that female board representation enhances corporate OI investment within EMNEs.
AB - Little research has been done on female board representation in emerging market multinational enterprises (EMNEs). Our paper considers the role of female board representation and its impact on open innovation (OI) in the unique context of emerging markets. We draw on upper echelons and institutional theories to understand how female board representation and cross country institutional contexts influence coupled OI. Combining a 10-year (2009-2019) dataset with a rich in-depth content analysis of 183 (EMNEs) engaged in OI, our results reveal a significant positive association between female board representation and a firm’s commitment to coupled OI initiatives. We also find that country-level institutional factors affect and positively moderate the relationship between female board representation and coupled OI. In emerging market environments where managerial perception and cultural beliefs sometimes hinder the promotion of females into top positions, our work has implications for EMNEs regarding how they harness diversity. We contribute to the OI literature by showing that female board representation enhances corporate OI investment within EMNEs.
KW - Coupled open innovation (OI)
KW - Female board representation
KW - Emerging market multinational enterprises (EMNEs)
KW - Institutional context
UR - http://www.scopus.com/inward/record.url?scp=85151273489&partnerID=8YFLogxK
U2 - 10.1016/j.technovation.2023.102749
DO - 10.1016/j.technovation.2023.102749
M3 - Article
VL - 124
JO - Technovation
JF - Technovation
SN - 0166-4972
M1 - 102749
ER -
