Independent Female Directors and Green Innovation in China: The Moderating Roles of Ownership Structure and Market Competition

ABSTRACT This study examines the impact of independent female directors (IFDs) on green innovation (GI) among Chinese‐listed firms from 2008 to 2023. Additionally, we investigate the moderating effects of ownership structure and market competition on the relationship between IFD and GI. Using a total of 22,091 firm‐year observations and fixed‐effects regressions, we find that IFDs are significantly and positively associated with GI, suggesting that IFDs promote environmentally friendly activities. Furthermore, the results show that ownership structure and market competition influence the relationship between IFD and GI, with the association being more pronounced in state‐owned enterprises (SOESs) and weakening when market competition is high. Moreover, we divided our sample and discovered that IFDs foster GI activities in polluting industries more than in nonpolluting ones. Our findings remain robust across various statistical procedures. The results highlight the vital role of IFD in advancing GI and indicate that its effectiveness depends on institutional and competitive factors. Unlike previous research, this paper moves beyond overall board gender diversity by focusing specifically on IFD, while identifying ownership structure and market competition as key contextual factors in an emerging economy. This study offers important implications for policymakers in China by demonstrating that board independence can be strengthened through the appointment of IFD and that it can effectively promote GI, especially in SOES and environmentally sensitive industries.