Board gender diversity, nonmarket strategy and firm performance: Evidence from emerging markets MNCs

Firms operating in foreign markets often engage in nonmarket activity for various benefits, such as gaining legitimacy, reducing uncertainty and enhancing performance. This is particularly true for emerging markets multinationals corporations (EMNCs) in advanced countries, as they commonly experience liabilities and challenges due to their origin. Leveraging institutional theory, we conceptualize board gender diversity as a nonmarket strategy, and investigate its impact on the performance of EMNCs. Using data from a sample of Chinese and Indian foreign subsidiaries, we find that board gender diversity improves performance. This effect is stronger for firms having public relations functions and also for firms operating in foreign countries with high institutional gender parity. These findings, besides significantly adding to the literature, have practical and managerial implications.