Green Investment and Firm Value: The Moderating Role of Board Gender Diversity

Abstract

This study examines the impact of green investment on firm value, with board gender diversity as a moderator. As its importance rises, green investment has become a key part of corporate strategy, especially as companies face increasing environmental pressure and stakeholder expectations. The study uses panel data and regression analysis, including all non-financial companies listed on the Pakistan Stock Exchange (PSX) for the period 2016–2025. To verify the empirical results, the study includes robustness and endogeneity tests. Based on agency theory and stakeholder theory, the findings show that green investment increases firms' market value by improving environmental performance, corporate reputation, stakeholder relationships, and long-term strategic position. However, the role of green investment in firm value depends on the effectiveness and variety of corporate governance. Moreover, a gender-diverse board offers more diverse insights, more robust monitoring, and increased focus on environmental and stakeholder issues. Hence, this study provides further evidence that board gender diversity strengthens the relationship between green investment and firm value based on resource-based theory. The study is relevant to the growing literature on green investment because it contributes to the value implications of green investment in an emerging-market setting by focusing on board gender diversity.

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