ESG and it’s Impact on Investment Efficiency: Moderating Role of Board Gender Diversity

Abstract

This study investigates the impact of Environmental, Social, and Governance and ESG on Investment Efficiency in non-financial manufacturing firms of Gulf Cooperation Council (GCC) countries with a specific lens on the moderating role of Board Gender Diversity (BGD). The study seeks to establish the nexus through which corporate governance and sustainability practices can enhance financial performance as well as resource management among these industries. It finds its significance based on increased requirements for implementing aspects of sustainability and corporate governance as drivers of long-term growth while facilitating economic diversification in the region under such initiatives as Saudi Vision 2030 and UAE Vision 2021. Using secondary data of firms from Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, this study elaborates on the direct effects of ESG on Investment Efficiency while moderating for Board Gender Diversity (BGD) between the nexus of ESG and investment outcomes. The results show that good corporate governance and social responsibility give higher Investment Efficiency to firms’ resource allocation accompanied by better resource management. Moreover, it is found that the presence of gender-diverse boards intensifies the effect of ESG which means that inclusive leadership inspires more robust corporate governance and sustainability practices to create better financial performance. This study advocates robust ESG frameworks and gender diversity as crucial elements of sustainable economic growth and Investment Efficiency, offering insightful information to policymakers, business managers, and investors in the GCC countries.