Introduction

The IPCC (2018) reported that by 2017, global warming driven by human activities had exceeded pre-industrial levels by 1 °C and was rising at a pace of 0.2 °C per decade. The ongoing increase in global temperatures poses an obstacle to human survival and advancement (Wang et al. 2024). As a result, sustainable development and carbon emission reduction have emerged as urgent global priorities (Dogan et al. 2022; Zhang et al. 2025). In particular, China’s CO2 emissions from fuel combustion surged by 244%, rising from 3097 Mt in 2000 to 10,649 Mt in 2021, according to IEA (2021). This shows that the tremendous economic expansion of China over the previous 20 years has caused vast carbon emissions that endanger ecological sustainability. In this context, growing attention has been paid by researchers and decision-makers to the challenge of reconciling economic development with carbon mitigation (Fan et al. 2015). Carbon performance serves as a critical metric for assessing the intricate relationship between economic growth and carbon emissions. It is an essential indicator for evaluating the progress toward a low-carbon, environmentally friendly economy (Al Rabab’a et al. 2023). Therefore, conducting a comprehensive analysis of the factors influencing carbon performance is crucial for guiding the transition to an environmentally sustainable economic model.

As the cornerstone of economic development and climate mitigation efforts, improvements in carbon performance are reliant upon corporations (Chen et al. 2022a). Improving corporate carbon performance (CCP) must begin with strengthening corporate governance structures (Konadu et al. 2022), as the executive team not only sets corporate direction but also makes key decisions that directly impact CCP (Hussain et al. 2018). More attention is being paid to how females affect CCP as the number of females working for the company continues to rise (Caby et al. 2024). Research suggests that female executives tend to enforce ethical behavior, improve environmental performance, and fulfill social responsibilities (Zhang et al. 2022). Consequently, they can motivate corporations to reduce carbon emissions and enhance carbon information disclosure (Siddique et al. 2023). Furthermore, executive power reflects executives’ control ability over the corporation, and executives with more power are more able to influence environmental decisions and environmental performance. Collectively, female executives not only propose carbon reduction strategies but also leverage their authority to ensure these strategies are effectively implemented. However, limited research has explored the combined influence of executive gender and power on CCP. Specifically, does female executive power (FEP) positively impact CCP? If so, through what mechanisms does FEP influence CCP?

To fill the above-mentioned research gap, this study adopts upper echelons theory (UET) as its primary analytical framework (Hambrick, 2007). It emphasizes the crucial role of executives’ individual characteristics (especially gender and power) in shaping corporate strategy and organizational outcomes. Based on this framework, we argue that greater power enables female executives to more effectively translate their carbon reduction intentions into actionable strategies, thus enhancing CCP. Additionally, we incorporate social role theory (SRT) to clarify how societal expectations shape the behavior of female executives (Eagly and Wood 2012). As a result, environmental responsibility and sustainable development are more frequently reflected in their strategic agendas. The integration of UET and SRT helps overcome the limitations of a single-theory perspective. It lays a solid conceptual basis for exploring how FEP influences corporate progress toward low-carbon development.

The key contributions of this study are as follows: First, this study extends the literature on UET and SRT by examining the impact of FEP on CCP. Prior studies tend to use UET to examine how leadership characteristics affect governance outcomes, while SRT is typically applied to explore gender-based differences in strategic decision-making (Oh and Song 2023; Tang et al. 2024). However, few have integrated the two perspectives. This study primarily draws on UET, supplemented by SRT, to propose and empirically confirm the critical influence of FEP on advancing corporate low-carbon governance. Second, this study enriches the research on the determinants of CCP. Although existing micro-level studies have acknowledged the influence of executive gender ratio on corporate carbon reduction (Shui et al. 2022), such measures fail to fully capture the actual impact of female executives. To address this gap, we introduce the concept of FEP, explore its effect on CCP, and further examine potential nonlinear relationships. Third, this study uncovers the mechanisms through which FEP affects CCP. By incorporating corporate digital transformation (CDT) and corporate green innovation (CGI) as mediating variables, we empirically test how FEP contributes to enhanced CCP, filling the research gap in the dimension of mechanism identification in existing literature. Finally, recognizing that corporations differ significantly in their organizational features and external institutional environments (Zhang et al. 2022), we further investigate the heterogeneity in the relationship between FEP and CCP. Specifically, we analyze how internal characteristics (such as factor intensity, corporation size, and ownership structure) and external conditions (such as environmental regulation, marketization level, and public environmental awareness) jointly influence corporate attention allocation and resource distribution, thereby shaping the strength and direction of FEP’s impact on CCP.

The remainder is structured as follows: Section “Literature review” provides a review of the literature on CCP and FEP. In Section “Theoretical analysis and research hypotheses”, we present our research hypotheses. Section “Sample selection and study design” explains the process used to select the sample and the design of the research, as depicted in Fig. 1. Section “Results” covers the study results. Section “Mechanistic tests” provides the mechanism analysis. Section “Heterogeneity analysis” contains heterogeneity analysis. Section “Further study” is further study. Finally, Section “Conclusions, research significance and future research” contains conclusions, discussion, recommendations, and limitations.

Fig. 1
Fig. 1The alternative text for this image may have been generated using AI.
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Research framework.

Literature review

Factors influencing CCP

CCP is defined as the revenue produced for each unit of carbon emissions (Busch et al. 2022). Existing research suggests that the determinants of CCP can be broadly categorized into two dimensions: external environmental factors and internal corporate management. From an external perspective, carbon emission reduction is closely linked to both local government initiatives and national policies. Specifically, local governments can enhance CCP through financial incentives, market regulations, and environmental information disclosure (Chen and He 2024). At the national level, the low-carbon city pilot (LCCP) policy has been proposed and empirically shown to contribute to corporate carbon emission reduction (Du and Wang 2022).

From an internal management perspective, CCP can be enhanced through the implementation of a carbon management system and the promotion of low-carbon technological innovation. On the one hand, establishing a robust carbon management system contributes to CCP improvement by setting carbon reduction targets, formulating carbon strategies, and facilitating carbon information disclosure (Doda et al. 2016). On the other hand, low-carbon technological innovation plays a pivotal role in enhancing energy efficiency, enabling energy conservation, and reducing emissions (Miao et al. 2024). In particular, executives serve as central figures in corporate governance, exerting direct influence on both carbon management and low-carbon technology allocation (Jiang et al. 2022). Thus, CCP is shaped by key executive attributes, including gender, background in international affairs, and emphasis on regulatory compliance (Lemma et al. 2023; Liu 2024; Wagner and Fischer‐Kreer 2024). Recently, scholars have begun to focus on this issue and launched several studies. Among these studies, executive gender has garnered significant attention, driven by rising awareness of gender equality (Elsayih et al. 2021).

Results for female executives

More female executives are breaking the “glass ceiling” and contributing to corporate governance and business decision-making as women’s social status and educational attainment have improved (Lewellyn and Muller-Kahle 2020). Historically, men have dominated the executive team (Lyngsie and Foss 2017), which has improved corporate performance. However, they are more prone to be self-confident in making decisions (Chen et al. 2019), which may increase decision-making risks and over-investment (Wille et al. 2018). SRT characterizes women are altruistic, kind, pleasant, caring, unselfish, and helpful (Atif et al. 2020). Thus, women on top management teams prioritize corporate ethics, social responsibility, and environmental performance. Specifically, female executives can incentivize corporate green innovation (Javed et al. 2023), increase corporate environmental investment (Yan et al. 2024), and reduce environmental violations (Liu 2018).

Despite growing research on female executives’ roles in carbon disclosure and emission reduction, the impact of FEP on CCP remains largely unexplored. Nuber and Velte (2021) elucidate the impact of female executives on carbon reduction by utilizing legitimacy and critical mass theories. Other scholars have applied UET, SRT, stakeholder theory, and resource dependence theory to analyze female executives’ influence on carbon reduction (Konadu et al. 2022). As for carbon information disclosure, a study by Caby et al. (2024) in the technology business found that female executives can make voluntary carbon disclosure, and the quality is much better. Similarly, according to Ben-Amar et al. (2017), voluntary carbon disclosure rises in Canadian corporations only when female board representation crosses a certain threshold. Chu (2024) expanded the analysis to China and found that having female executives is linked to more carbon disclosure.

Although research shows that female executive presence improves carbon disclosure and emission reduction, the role of power has been ignored. Power is defined as an executive’s ability to affect business decisions (Chiu et al. 2022). An in-depth knowledge of how female executives affect the environmental performance of their corporations is essential. Hence, it is crucial to carry out research that investigates the correlation between FEP and CCP. Furthermore, we argue that improving CCP is a strategic imperative for China in achieving green and sustainable growth (Shi et al. 2023). Given the limited research in China, greater emphasis should be placed on understanding how female executives influence CCP in the Chinese market rather than focusing solely on foreign settings.

Thus, this study explores the effect of FEP on CCP by analyzing data from 2057 Chinese listed corporations between 2010 and 2022 for better carbon reduction tactics. First, we examine how FEP influences CCP through CDT and CGI. Second, we conduct six heterogeneity analyses to assess whether the impact of FEP on CCP varies across corporate characteristics (factor intensity, firm size, and property rights) and regional characteristics (government environmental regulation, marketization levels, and public environmental awareness). Additionally, we find evidence of potential non-linear effects of FEP on CCP.

Theoretical analysis and research hypotheses

Direct effect of FEP on CCP

In exploring the impact of FEP on CCP, two key questions need to be considered: Why are female executives inclined to enhance CCP, and how can they effectively contribute to this goal?

Firstly, according to SRT, this study explains why female executives are more inclined to enhance CCP. SRT suggests that, through long-term socialization, women are generally associated with stronger empathy, a greater tendency to cooperate, and a heightened sense of social responsibility (Adams and Funk 2012). These traits enhance their awareness of environmental concerns and increase their propensity to integrate corporate growth with sustainability goals (Glass et al. 2016). Consequently, female executives are inclined to emphasize environmental performance and carbon reduction when formulating strategic decisions.

Secondly, drawing on UET, this study further explains why FEP can effectively enhance CCP. UET highlights that corporate strategies are deeply embedded in the values, cognition, and personalities of senior executives (Hewa Heenipellage et al. 2022). Gender, as a core personality-related attribute, influences executives’ strategic judgments, especially in complex, dynamic, and uncertain business environments. When combined with SRT, it becomes clear that female executives are more likely to embed environmental responsibility into corporate visions and incorporate low-carbon goals into organizational governance (Liu et al. 2024).

However, the extent to which these values translate into organizational strategy largely depends on the power female executives wield (Tang et al. 2011). Power, as an asymmetric resource control mechanism, enables female executives to dominate strategic discourse, suppress conservative resistance, coordinate resource allocation, and lead strategic implementation (Zhang et al. 2022). As FEP increases, female executives not only become more capable of designing sustainability-oriented strategies but also more effective in executing them, thereby significantly improving CCP.

H1. FEP has a positive effect on CCP.

Mechanistic tests of FEP on CCP

FEP, CDT, and CCP

FEP can improve CCP by accelerating the CDT. First, FEP can facilitate CDT by mitigating myopic management behavior. In traditional principal-agent structures, executives often prioritize short-term performance at the cost of long-term investment (Zajac and Goranova 2024). CDT, characterized by high costs and delayed returns, frequently encounters internal resistance due to short-sighted decision-making (Zhai et al. 2022). According to SRT, women tend to develop long-term value orientations through socialization (Adams and Funk 2012; Kiefner et al. 2022), making female executives more inclined to support sustainable and forward-looking strategic initiatives such as CDT. According to UET, executive power enables the transformation of personal value judgments into concrete strategic actions (Sun et al. 2024). When female executives possess greater power, they are better positioned to incorporate long-term perspectives into organizational decisions and suppress short-term tendencies. Therefore, enhanced FEP helps corporations overcome short-termism and ensures sustained support for CDT implementation.

Second, digital transformation improves CCP through internal control (Shang et al. 2023). Through digital transformation, corporations can establish intelligent internal control systems that enable real-time monitoring of carbon emissions, ensuring regulatory compliance and improving overall carbon management efficiency. Moreover, CDT facilitates the optimization of production scheduling through intelligent internal controls, enhancing energy efficiency. This enables corporations to minimize carbon emissions without compromising operational productivity, thereby promoting both sustainability and competitive advantage. In summary, FEP mitigates short-term managerial tendencies, facilitates the advancement of CDT, and ultimately enhances CCP by optimizing internal control. Thus, this study formulates hypothesis 2.

H2. FEP positively affects CCP by improving CDT.

FEP, CGI, and CCP

FEP can improve CCP by CGI (Lakhal et al. 2024). On the one hand, female executives promote CGI by restraining excessive risk-taking behavior. CGI is characterized by high investment, high uncertainty, and long-time horizons (De Marchi 2012), which place significant demands on a corporate strategic risk-bearing capacity. While moderate level of risk-taking can facilitate green innovation (García-Granero et al. 2015), excessive risk-taking may lead to resource misallocation, increased failure rates, and the ultimate hindrance of innovation performance (Liu and Zhu 2024). In contrast, CGI is often supported by policy incentives (Wang et al. 2022), green market demand, and regulatory pressure (Liu et al. 2021), providing corporations with stronger external buffers and greater strategic certainty. As such, CGI represents a rational investment choice that balances sustainability with risk control.

According to SRT, female executives tend to exhibit stronger risk aversion and a heightened sense of social responsibility (Palvia et al. 2015). They are more likely to avoid aggressive, speculative strategies and instead focus on innovation activities that offer manageable risks and social value. CGI aligns with this “prudent yet progressive” logic, making it more likely to be recognized and advanced by female executives. Furthermore, based on UET, executives’ risk preferences are embedded in corporate strategies. When female executives hold greater decision-making power, they are better positioned to guide strategic direction and adjust the risk profile. This allows them to translate their preference for rational innovation into concrete actions that support CGI (Liu and Zhu 2024). Therefore, stronger FEP helps corporations avoid extreme risk-taking and provides a stable foundation for the effective advancement of CGI.

Second, female executives often face gender bias or discrimination at the organizational level, an environment that, in turn, stimulates their innovative behavior. They often propose forward-looking or high-risk strategies in order to prove their competence (Javed et al. 2023). Especially in the field of environmental governance, female executives tend to break away from the traditional management models and further promote CGI by introducing innovative and green development-oriented initiatives. On the other hand, CGI development enhances CCP by reducing dependence on traditional energy sources (Liu 2024). Through the adoption of energy-efficient production processes and advanced technologies, corporations can optimize energy utilization and lower carbon emissions per unit of output. This not only reduces corporate energy costs but also effectively minimizes the carbon footprint generated during production. Thus, this study proposes hypothesis 3.

H3. FEP positively affects CCP by promoting CGI.

Sample selection and study design

Modeling

Test of direct effect

Model (1) was established to examine the association between FEP on CCP.

$$CC{P}_{i,t}={\beta }_{0}+{\beta }_{1}FE{P}_{i,t}+{\beta }_{2}Contro{l}_{i,t}+{\lambda }_{t}+{\mu }_{i}+{\varepsilon }_{i,t}$$
(1)

where i represents corporations and t indicates years. Contorli,t denotes the control variables. The εi,t, λi, μt stand for the random error term and the individual fixed effects and time fixed effects.

Test of mediation effect

This study seeks to analyze the internal logic of FEP and its positive impact on CCP. A three-dimensional test is used to investigate the mediating effect of CDT and CGI (Li et al. 2024a). The redesigned models are presented in Model (2) and (3). Partial mediation effects arise if α1, α2 and γ1 are significant.

$$Mediato{r}_{i,t}={\gamma }_{0}+{\gamma }_{1}FE{P}_{i,t}+{\gamma }_{2}Contro{l}_{i,t}+{\lambda }_{t}+{\mu }_{i}+{\varepsilon }_{i,t}$$
(2)
$$\begin{array}{l}CC{P}_{i,t}={\alpha }_{0}+{\alpha }_{1}FE{P}_{i,t}+{\alpha }_{2}Mediato{r}_{i,t}\\\quad\qquad\quad+{\alpha }_{3}Contro{l}_{i,t}+{\lambda }_{t}+{\mu }_{i}+{\varepsilon }_{i,t}\end{array}$$
(3)

where \({Mediator}\) were the mediating variable, which denotes the digital transformation and the green innovation.

Description of variables

Explained variable

After reviewing prior literature, we observe that many studies measure CCP by dividing a corporate operating income by its carbon emissions (Eq. (4)) (Li et al. 2024b). However, in China, corporate carbon emissions disclosure is not strictly regulated. This makes it hard to get reliable data on corporate carbon emissions. To address this issue, we refer to the method employed by Song et al. (2024). They use industry energy consumption to estimate corporate carbon emissions. The calculation process is detailed in Eqs. (5) and (6).

$$CCP=ln\frac{Corporate\,operating\,income}{Corporate\,carbon\,emissions}$$
(4)
$$\begin{array}{l}Corporate\,carbon\,emissions=\frac{Industry\,carbon\,emissions}{Industry\,operating\,costs}\\\qquad\qquad\qquad\qquad\qquad\qquad\quad\times Corporate\,operating\,costs\end{array}$$
(5)
$$\begin{array}{l}Industry\,carbon\,emissions=\mathop{\sum }\limits_{i=1}^{8}Industry\,carbon\,emission{s}_{i}\\\qquad\qquad\qquad\qquad\qquad\qquad=\mathop{\sum }\limits_{i=1}^{8}{E}_{i}{\varpi }_{i}{\zeta }_{i}\end{array}$$
(6)

where Ei denotes the consumption of the i-th energy type, while \({\varpi }_{i}\) and \({\zeta }_{i}\) correspond to its standard coal conversion coefficient and carbon emission coefficient, respectively. Energy is classified into eight categories (e.g., coal, gasoline, diesel).

Explanatory variable

The explanatory variable is female executive power. Referring to Finkelstein (1992), eight indicators were selected. These selections span four areas: structural power, ownership power, prestige power, and expert power. A comprehensive indicator system was then constructed. This construction utilized the vertical and horizontal scatter degree method proposed by Guo (2002). First, age and work experience typically equate to increased power as they signify extensive knowledge and expertise. Long-tenured female executives tend to be more effective in addressing business challenges, illustrating the evolution of their power (Suherman et al. 2021). Moreover, when female executives possess corporation shares, their decisions prioritize corporate interests, thereby strengthening their power (Shui et al. 2022). Salary levels also reflect the position of female executives and their status in the organization (Wang et al. 2023b). A larger presence of female executives in leadership and board positions signifies that the organization promotes gender equality and offers equal opportunities, thus enhancing their influence. Higher educational qualifications attest to the expertise and management skills of female executives, which help them gain more power (Choi et al. 2022). Female executives who are both chairpersons and CEOs have particularly significant and stable power in their organizations due to the concentration of positions. All these factors together shape the power patterns of female executives in business (Table 1).

Table 1 The dimension index of FEP.
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Control variables

Referring to Zhang et al. (2024), this study finally controls the following variables. (1) Leverage ratio (LEV). (2) Firm size (SIZE). (3) Largest shareholder ownership ratio (TOP). (4) Return on equity (ROE). (5) Management fees (MFE). (6) Return on assets (ROA). (7) Accounts receivable ratio (REC). (8) Fixed asset ratio (FIX).

Mediating variables

Corporate digital transformation. The measurement of CDT can be based on two dimensions, i.e., digital technology and digital technology application (Yang et al. 2024). Specifically, the digital technology dimension is subdivided into four key areas: AI technology, cloud computing technology, blockchain and big data. The digital technology application dimension covers specific application scenarios such as mobile internet, industrial internet, and mobile payment. Building on Wu et al. (2022), this study identifies 46 keywords from the above four technology areas and selects 34 keywords in the digital technology application. Based on this vocabulary, this study further employs text analysis to construct indicators reflecting CDT.

Corporate green innovation. Prior studies typically evaluate corporate green innovation using indicators such as R&D investment and counts of green patent filings. Compared with R&D investment, green patents more directly reflect actual output in green innovation. Patent grants are subject to several limitations. They suffer from time lag and is easily influenced by external factors. Therefore, following Chen et al. (2022b), this study employs the logarithm of green patent applications (plus one) filed by corporations within the same year as an indicator. This measures corporate green innovation.

Data sources and description

This study analyzes 2010–2022 A-share listed corporation data to determine the influence of FEP on CCP. Data on female executives and carbon performance are from the CSMAR database. The initial sample was refined by excluding the following: (1) banking and insurance companies; (2) companies designated as ST, *ST, or PT; and (3) companies with missing data. Additionally, it was discovered that the equation had a heteroskedasticity problem after using the OLS regression and White test. To fix this, robust standard errors were added to the future regressions.

Table 2 displays the descriptive statistics for the relevant variables. The mean value of FEP is 0.538, with a range of 0.166 to 0.752. This suggests variation in the power levels of female executives across diverse companies. The mean value of CCP is 10.830, with values ranging from 1.412 to 17.472. This suggests that there are variations in carbon performance among corporations and that there is potential for enhancing overall carbon performance. The descriptive statistics of the control variables match prior studies without abnormalities.

Table 2 Variables and descriptive statistics results.
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Results

Benchmark regression results

Table 3 reports the results of the baseline regressions regarding FEP’s influence on CCP. In column (1), only the core explanatory variable is included, alongside firm and year fixed effects. The results reveal that the coefficient on FEP remains significantly positive, suggesting that FEP positively influences CCP. In column (2), after introducing additional control variables, the positive impact of FEP on CCP persists, confirming the robustness of the initial findings. The H1 has been supported. Specifically, firm size, largest shareholder ownership ratio, management fees, and return on assets all have a positive effect on CCP. These factors usually imply that corporations have more resources and capabilities to implement green technologies and management. This leads to more effective control and reduction of carbon emissions, resulting in improved carbon performance. However, leverage ratio and return on equity have a negative effect on CCP. This suggests that high leverage and too much focus on return on shareholders’ equity may lead corporations to neglect long-term and sustainable green investment. In turn, this inhibits their carbon performance. In addition, accounts receivable ratio and fixed asset ratio do not have a significant effect on CCP.

Table 3 Stepwise regression results.
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Robustness test

In the baseline regression, this paper uses the FEP calculated by the vertical and horizontal scatter degree method for regression analysis. To verify the reliability of the results, the entropy method is also applied to construct a composite FEP indicator. This composite indicator is then regressed on the CCP. The results are presented in column (1) of Table 4. Next, quantile regression is used because it better captures the characteristics of the tails of the data distribution. It is also less sensitive to extreme values. Thus, this study selects three quartiles: Q25, Q50, and Q75. These represent lower-carbon performing corporations, medium-carbon performing corporations, and higher-carbon performing corporations, respectively. The results of the panel quantile regressions, reported in columns (2)–(4) of Table 4, show that the coefficients of FEP remain broadly consistent with those observed in the baseline analysis. Additionally, the coefficients are significant across all quantile levels. This further strengthens the credibility of the findings. Finally, China enacted LCCP during the sample period, which can improve CCP (Feng et al. 2021). To mitigate estimation bias from the LCCP policy, we have incorporated a dummy variable for the LCCP policy. The FEP coefficient remained significantly positive after the regression analysis was performed again. H1 was revalidated.

Table 4 Robustness regression results.
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Endogeneity test

This study uses an instrumental variable (IV) technique to reduce model endogeneity from reverse causality. We employ the market competition (MC_IV) as an IV during the testing procedure (He and Gan 2025). Intense market competition drives corporations to optimize decision-making structures and enhance management team diversity. This improves adaptability and grants executive greater decision-making power. At the same time, increasing competition pushes corporations to focus more on long-term competitiveness. Female executives, with their strengths in low-carbon management and corporate social responsibility, gain greater influence in this context. Moreover, market competition has a limited direct impact on corporate carbon performance. It cannot fully explain variations in corporate carbon management. Therefore, market competition meets both exogeneity and relevance criteria, making it a valid instrumental variable for examining the impact of FEP on CCP.

Column (1) of Table 5 reports a significant positive correlation between market competition and female executive power, confirming the validity of market competition as an instrumental variable. In the second-stage regression analysis, the under-identification test reports a p value of 0.000, while the weak instrument test produces an F-value of 19.241, well above the 10% threshold. These results further support the rationality of selecting market competition as an instrumental variable. Table 5, column (2), further confirms that after replacing FEP with the predicted value of market competition, the impact of FEP on CCP remains significantly positive. This finding reinforces the reliability and robustness of the study’s conclusions.

Table 5 Endogeneity test regression results.
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The sample selection problem was addressed in this study using the propensity score matching (PSM) method. Following Zhang et al. (2022), the sample is divided into high- and low-power groups according to the median value of annual FEP. The control variables were covariates, and a radius match with a matching radius of 0.01 paired each high-power sample with a low-power sample with similar anticipated propensity score values. The balance test results in Table 6 show that the bias of matched variables is less than 10%. The t-value is significantly greater than 10%. These confirm that propensity score matching passes the balance test. It effectively addresses issues caused by misspecification of functional forms. Column (3) in Table 5 presents the results of the regression analysis. The coefficient is positive, indicating the validity of H1. Furthermore, the Heckman two-stage model is utilized in this study. The estimated Inverse Mills Ratio (IMR) is derived using Probit regression and added to Model (1) in the second step. After adjusting for sample selection bias, column (4) of Table 5 shows that the impact of FEP on CCP remain significant after the regression.

Table 6 Comparison of sample mean before and after matching.
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Mechanistic tests

The theoretical analysis states that FEP can enhance CCP by accelerating CDT and improving CGI. Therefore, this section examines the specific mechanism of FEP on CCP from two perspectives: corporate digital transformation and corporate green innovation.

Mechanisms test of CDT

In the process of CDT, the core driving force is the willingness of strategic decision-makers to transform and their ability to do so. In particular, female executives are often able to gain a deeper insight into the pivotal role of CDT in securing long-term corporate success. This cognitive advantage makes them important advocates in driving CDT. Further, when female executives occupy key positions of power in a corporation, they can mobilize resources more effectively to accelerate the implementation of digital transformation strategies. Simultaneously, CDT is not a mere technological innovation, but a transformation involving fundamental changes in operation logic and business models. This transformation process aims to achieve optimal resource allocation and refined operation management through technology empowerment, and thus improve the CCP. Given this, we consider CDT as a mechanism through which FEP plays a role in CCP improvement and empirically examine it. According to Fig. 2, FEP exerts a significant positive effect on CDT. Additionally, the regression coefficients for both FEP and CDT on CCP are significantly positive, suggesting that female executive power enhances corporate carbon performance by accelerating digital transformation. To validate the mediation effect, this study uses the Sobel test and the Bootstrap test. The Sobel test yields a p value of 0.019. Meanwhile, the confidence intervals obtained from the Bootstrap test exclude zero. These results confirm that digital transformation mediates the relationship between FEP and CCP. Moreover, digital transformation plays a partial mediating role. Therefore, H2 is supported by the data.

Fig. 2: The mediating effect of CDT and CGI performance.
Fig. 2: The mediating effect of CDT and CGI performance.The alternative text for this image may have been generated using AI.
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a Mediating effect test results of CDT. b Mediating effect test results of CGI. The numbers on the arrows represent path coefficients of Fig. 2, with t statistics in parentheses. *p < 0.10, **p < 0.05, ***p < 0.01.

Mechanistic tests of CGI

The cognitive preferences and values of executives directly influence corporate strategic decisions, particularly in choosing paths for green development. Female executives often demonstrate a heightened awareness of risk avoidance. This tendency leads them to prioritize green investments that offer long-term stable returns and align with sustainable development trends, while avoiding short-term high-risk projects. Additionally, female executives possess a stronger long-term perspective. This enables them to look beyond short-term profit goals and focus more on fulfilling corporate environmental responsibilities and enhancing social reputation. This sustainability-oriented mindset encourages corporations to prioritize a balance between ecological and social benefits, in contrast to traditional high-return-driven decision-making. Guided by these cognitive preferences and values, female executives tend to integrate green development into the core of corporate strategies. They establish clear green development goals, providing a solid foundation for advancing green innovation. By implementing green innovation, corporations can significantly reduce energy consumption and carbon emission intensity during production, thereby improving overall carbon performance. Accordingly, this study considers CGI as a mediator through which FEP influences CCP and conducts relevant testing. The results of the three-step regression analysis and robustness tests, presented in Fig. 2, confirm that hypothesis H3 is valid.

Heterogeneity analysis

This study investigates how FEP affects CCP varies across different dimensions. The analysis focuses on three internal attributes of corporations: factor endowment, size difference, and ownership structure. Additionally, it considers three external regional characteristics: the intensity of environmental regulation, the level of marketization, and public environmental concern. The regression results are presented in Figs. 3 and 4.

Fig. 3: Heterogeneity analysis of intra-corporation properties.
Fig. 3: Heterogeneity analysis of intra-corporation properties.The alternative text for this image may have been generated using AI.
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The points represent the estimated coefficients, and the horizontal lines indicate 90% confidence intervals. If the 90% confidence interval intersects the vertical dashed line at zero, the corresponding coefficient is not statistically significant.

Fig. 4: Heterogeneity analysis of corporate external environment.
Fig. 4: Heterogeneity analysis of corporate external environment.The alternative text for this image may have been generated using AI.
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The points represent the estimated coefficients, and the horizontal lines indicate 90% confidence intervals. If the 90% confidence interval intersects the vertical dashed line at zero, the corresponding coefficient is not statistically significant.

Corporate characteristics

The corporate factor intensity directly influences its management and resource allocation priorities. When these priorities conflict with the environmental governance intentions of female executives, their power to improve the CCP may be diminished. Therefore, based on the above analysis, it is essential to examine how FEP impacts CCP with different factor endowments, using factor intensity as the basis for grouping. This study uses the median net fixed assets to employee ratio to classify corporations as labor-intensive or capital-intensive. FEP affects CCP in capital-intensive corporations but not labor-intensive ones. This phenomenon may be caused by the fact that in labor-intensive corporations, management decisions may be more related to human resource management, production organization, and labor cost control. In contrast, environmental measures may be seen as secondary tasks or additional burdens. As a result, even if women executives have the will to promote environmental improvements, they may struggle to achieve significant results because of prioritization. Therefore, the impact of FEP on CCP may be restricted.

Corporations of different sizes vary in their emphasis on long-term goals and the level of regulatory constraints and scrutiny they face. These differences lead to varying strengths of resistance that female executives face in their willingness to promote green development. Accordingly, it is essential to examine whether there are differences in the contribution of FEP to CCP across corporations of varying sizes. Given the relatively uniform development patterns of domestic small and medium-sized enterprises (SMEs), this study groups SMEs into a single category and focuses on the differential impacts between large corporations and SMEs. Specifically, the sample corporations are classified into large corporations and SMEs based on the Measures for the Classification of Statistically Large, Small, Medium, and Micro Enterprises issued by the National Bureau of Statistics in 2011. The regression results (shown in Fig. 3) show that the effect of FEP on CCP is not significant in SMEs, while its impact is significant in large corporations. This discrepancy can be attributed to resource differences. SMEs often face resource constraints and prioritize survival and short-term profitability, leaving green development as a secondary concern in their strategic planning. In contrast, large corporations have more resources and face stricter regulatory constraints as well as higher social responsibility expectations. Within this context, female executives can exert greater influence on environmental governance, fulfill corporate social responsibilities through green initiatives, and significantly enhance CCP.

Corporations are classified as state-owned or non-state-owned based on their ownership structure (Wu and Li 2024). In state-owned corporations (SOEs), decision-making is highly centralized, with key decisions dominated by the government or controlling shareholders. Executives often act as implementers, limiting the scope of their influence. In contrast, non-SOEs have greater decision-making flexibility, with strategies more reliant on executives’ personal values and intentions. This flexibility allows female executives to translate their environmental governance intentions into actions more effectively. Regression results show that FEP has no significant impact on CCP in SOEs but is significantly positive in non-SOEs. This difference may stem from the fact that SOEs’ environmental performance relies heavily on policies and higher-level directives, reducing the influence of individual executives. Although female executives in SOEs may have strong green intentions, the complex governance processes and rigid policy implementation often weaken their role in driving environmental outcomes.

Regional characteristics

Government environmental regulation is a key external institutional constraint that directly impacts corporation production, operations, and environmental management. The intensity of regulation determines corporate investments and actions in carbon reduction, influencing the contribution of FEP to CCP. Using the method of Jing and Liu (2024), this study classifies corporations into strong and weak environmental regulation zones. The results shown in Fig. 4 reveal that in weak regulation zones, FEP significantly enhances CCP. Female executives drive carbon performance improvements by promoting green policies, innovation, and investments, filling regulatory gaps and supporting sustainability in areas with limited external regulation. In contrast, in strong regulation zones, corporations face greater external pressure to reduce emissions and comply with policies. Here, CCP improvements are more likely driven by external forces rather than internal initiatives or female leadership.

The level of marketization refers to the maturity and effectiveness of regional market mechanisms, reflecting the strength of the market’s role in resource allocation. The marketization level of a corporation location directly influences its governance environment, resource allocation efficiency, and the autonomy of executive decision-making. This study examines how FEP impacts CCP under varying levels of marketisation. The regression results in Fig. 4 show that FEP has an insignificant effect on CCP in high-marketization regions but a significant effect in low-marketization regions. In high-marketization areas, corporations often have well-established low-carbon development systems. Carbon performance improvements are integrated into their operations and competitive strategies, reducing the visible impact of female executives. In contrast, low-marketization areas have less efficient resource allocation, and corporations lack motivation for environmental governance. Female executives, driven by social responsibility and green development intentions, play a direct role in promoting carbon reduction and significantly enhance CCP.

Public environmental concern reflects the importance society places on environmental issues. It influences corporate behavior through media coverage, consumer preferences, investor decisions, and policy-making, which in turn affect CCP (Tao et al. 2023). Based on this, the study classifies corporation locations into regions with high or low public environmental concern and conducts regression analyses. The results show that FEP does not have a significant effect on CCP in regions with high public environmental concern. This may be because corporations in these regions face greater external pressures, such as policy constraints, public scrutiny, and market competition. These pressures drive corporations to proactively adopt environmental governance measures. Improvements in CCP are more reliant on external institutional and market forces rather than the decisions of individual executives. Consequently, the role of FEP may be absorbed into the corporate governance framework, making its independent impact less visible. In contrast, in regions with low public environmental concern, corporations face less external pressure, and green development depends more on internal initiatives. In such cases, the will and power of individual executives are crucial for enhancing carbon performance.

Further study

In the initial stage of FEP promotion, female executives exhibit unique management characteristics and decision-making logic. These traits make them more inclined to adopt environmentally friendly strategies, thereby enhancing CCP. Additionally, female leaders accumulate ethical capital through carbon reduction practices. This process strengthens their influence at the decision-making level and establishes an “environmental governance–reputation premium–power reinforcement” enhancement circuit within the corporation.

However, as FEP continues to rise, power accumulation may lead to an alienation of the objective function. This shift reduces the focus on environmental governance and prioritizes self-interest. At lower levels of power, female executives tend to assume low-carbon responsibilities to demonstrate strategic competence and consolidate their leadership position. In contrast, at higher levels of power, they may shift their focus towards financial gains, career advancement, or short-term shareholder returns, while neglecting the corporate long-term environmental governance goals. Additionally, excessive concentration of female executive power may intensify internal governance frictions, reduce team coordination efficiency and ultimately weaken the firm’s environmental governance capacity. Effective executive team governance relies on a balanced distribution of power and a collective decision-making process. When power becomes overly centralized, team members’ perspectives may be overlooked, potentially triggering internal conflicts within management. This, in turn, can erode the effectiveness of environmental policies and hinder their implementation.

Hence, we propose that there may be an inverted U-shaped relationship between FEP and CCP, meaning that the effect of FEP on CCP exhibits a non-linear pattern, initially facilitating CCP but later inhibiting it as the level of power increases. To test the validity of this relationship, we extend Model (1) by incorporating the quadratic terms of the explanatory variables. This approach enables a more comprehensive and nuanced depiction of the dynamic changes in the relationship between FEP and CCP.

$$\begin{array}{l}CC{P}_{i,t}={\omega }_{0}+{\omega }_{1}FE{P}_{i,t}+{\omega }_{2}FE{P}_{i,t}^{2}+{\omega }_{3}Contro{l}_{i,t}\\\qquad\qquad+{\lambda }_{t}+{\mu }_{i}+{\varepsilon }_{i,t}\end{array}$$
(7)

Table 7 reports the impact of FEP and its quadratic term on CCP. In columns (1) and (2), the coefficient of the linear term for FEP is positive, while the coefficient of the quadratic term is negative, both of which are statistically significant. This indicates a clear inverted U-shaped relationship between FEP and CCP.

Table 7 Non-linear regression results of FEP on CCP.
Full size table

Conclusions, research significance and future research

Conclusions

Previous studies highlighted the significant influence of executive traits on corporate low-carbon transformation efforts (Lemma et al. 2023). Among them, the gender diversity of top management teams is considered influential in shaping corporate environmental strategic orientation (Saeed et al. 2022), while the CEO’s power level is closely associated with corporate environmental innovation performance (Zhang et al. 2022). Building on this foundation, this study further investigates the impact of FEP on CCP. The empirical findings align broadly with those of Konadu et al. (2022) and Barroso et al. (2024), who both argue that board gender diversity fosters corporate environmental innovation and thereby contributes to carbon emissions reduction. However, prior studies have neglected the influence of executive power on corporate carbon outcomes. Similarly, Liu et al. (2023) report a nonlinear, inverted U-shaped association between gender diversity within top management teams and green innovation, but their analysis does not extend to carbon performance. Therefore, this study further uncovers a curvilinear trend, while the overall impact remains positive. This phenomenon may be explained by the influence of traditional gender stereotypes. In order to break through the “glass ceiling” that commonly exists within corporations, female executives often emphasize self-confidence, decisiveness, and other “masculine” traits (Wille et al. 2018). Such adaptation may gradually shift their decision-making focus from social responsibility to more traditional, performance-oriented goals. Consequently, their prioritization of green and sustainable issues may weaken over time, ultimately reducing the marginal positive effect of FEP on CCP.

The mechanism test further demonstrates that FEP promotes CCP indirectly by advancing both CDT and CGI. On the one hand, female executives typically exhibit a stronger orientation toward long-term development (Adams and Funk 2012). They are more adept at recognizing the critical role of digital transformation in maintaining corporate competitiveness in the digital economy (Xiao et al. 2024) and understanding that green innovation serves as a key pathway for building sustainable competitive advantages (Le 2022). On the other hand, female executives generally show higher environmental responsibility awareness (Liu et al. 2023). Existing research has also confirmed that both digital transformation and green innovation are important approaches for firms to achieve carbon emission reductions (Wang et al. 2023a; Zhao et al. 2024). Therefore, whether driven by the pursuit of long-term performance or by the commitment to social responsibility and green transition, digital transformation and green innovation naturally become the preferred strategic choices for female executives (Liu et al. 2024). With sufficient power support, such strategic tendencies can be more effectively translated into organizational practices (Zhang et al. 2022), thereby continuously enhancing CCP.

Research significance

Theoretical contributions

This study offers several theoretical contributions to corporate governance and carbon performance research. First, it extends the application and integration of UET and SRT in the context of low-carbon governance. UET suggests that executives’ values and personality traits are embedded in corporate strategic decisions, thereby influencing corporations’ willingness to adopt voluntary environmental management systems and their overall carbon performance (Jiang et al. 2022; Saeed et al. 2022). Meanwhile, SRT argues that female executives are more attuned to stakeholders’ needs and exhibit greater sensitivity to environmental and social issues, which helps reduce corporate environmental violations and carbon emissions (Liu 2018; Nuber and Velte 2021). Building on these insights, this study uses UET to explain how FEP enhances the effectiveness of emission-reduction strategies, and draws on SRT to clarify the behavioral motivations behind female executives’ pro-environmental preferences. By integrating these two perspectives, this study provides new empirical evidence for the positive relationship between FEP and CCP. It deepens our understanding of how executive characteristics shape corporate sustainability strategies and expands the theoretical boundaries of UET and SRT in the context of green transition.

Second, this study extends the micro-level research on the determinants of CCP. Earlier studies have primarily concentrated on institutional environments or corporate strategic choices to explain variations in CCP (Du and Wang 2022; Miao et al. 2024). Existing literature acknowledges the environmental implications of governance practices and links gender-diverse boards with carbon emission levels (Valls Martínez et al. 2022). However, one important element is often left unaddressed: the actual level of power held by female executives. The effectiveness of executive decision-making depends not only on the presence of women in leadership but also on their ability to influence strategic outcomes. Compared to studies that focus solely on gender ratios, incorporating executive power offers a more accurate measure of their real impact on corporate strategy and implementation. Addressing this gap, the present study introduces the concept of FEP and explores its influence on CCP from a micro-level perspective. This approach contributes to refining the theoretical framework of corporate low-carbon transition by integrating executive agency into the analysis.

Third, this research contributes by uncovering the underlying pathways linking FEP to CCP, thereby addressing a previously underexplored area in the literature. Most prior studies emphasize the direct impact of executive traits on outcomes like carbon mitigation and disclosure, with limited exploration of the mediating processes involved (Ben-Amar et al. 2017). Thus, this study introduces CDT and CGI as mediating variables. Empirical evidence shows that FEP indirectly enhances CCP by promoting digital transformation and fostering green innovation. This mechanism-based approach not only broadens our understanding of how female executives influence corporate sustainability, but also deepens insights into the internal drivers of low-carbon transition. Moreover, both CDT and CGI serve as effective tools for female executives to implement emission-reduction strategies. They help reduce trial-and-error costs during the green transition and improve the efficiency and sustainability of low-carbon development. These findings offer dual implications for academic research and managerial practice.

Managerial implications

In the context of the global green transition and the ongoing pursuit of China’s “dual carbon” goals, this study offers several practical implications. First, the positive relationship between FEP and CCP highlights the importance of empowering female executives in corporate governance. Notably, this study reveals a non-linear relationship, where the positive effect of FEP on CCP initially strengthens and then gradually declines, suggesting that corporations should pay attention to power balance while enhancing female executive influence. It is therefore recommended that corporations improve governance structures by granting greater decision-making authority to female executives, while avoiding excessive concentration of power, in order to unlock the green transformation potential of diverse leadership teams. Furthermore, mechanism analysis indicates that FEP enhances CCP indirectly through two strategic pathways: CDT and CGI. Thus, digitalization and green innovation should not merely be viewed as development tools, but should be elevated to core strategic priorities in corporate governance, supported by long-term and stable investment mechanisms.

Based on the above findings, this study offers the following recommendations from both governmental and corporate perspectives to support the development of a more inclusive and sustainable green governance system.

From a government perspective, the first priority is fostering a more inclusive social environment for women to support their career advancement and leadership in low-carbon development. This involves promoting workplace gender equality and strengthening corporate governance regulations to encourage listed companies to establish gender diversity targets for boards and senior management, thereby enhancing female representation in corporate decision-making. Second, the government should strengthen policy support for digital transformation. Governmental efforts should focus on advancing the digital economy and encouraging the use of emerging technologies such as big data and AI in carbon emissions tracking and control. To reduce technical and financial barriers, it should provide funding programs and tax incentives for companies implementing digital carbon management systems, accelerating the integration of digital solutions in sustainability efforts. Finally, the government should enhance incentives for green innovation. To drive low-carbon technology innovation, the government should establish dedicated R&D funds and provide financial support to enterprises engaged in sustainable innovation. Additionally, it should encourage financial institutions to expand green credit support, lowering financing costs and increasing the adoption of green technologies across industries.

From the corporate perspective, corporations should foster more transparent and inclusive decision-making mechanisms. Establishing a fair and transparent promotion system is equally important. This ensures that all capable managers, including female executives, have equal opportunities to enter senior management teams. At the same time, corporations should optimize their internal governance structure. Preventing excessive concentration of executive power helps maintain balanced decision-making. Furthermore, corporations should prioritize digital transformation and green innovation as core development strategies. These efforts enhance market competitiveness in a low-carbon economic environment. By leveraging intelligent carbon emission monitoring systems, corporations can improve carbon management transparency. Investing in green technology research and development optimizes resource allocation and enhances operational efficiency. Together, these measures accelerate the transition toward a greener business model. In addition, corporations should focus on the effective implementation of sustainable development strategies. They can establish a green development proposal mechanism to encourage employee participation in low-carbon management and green innovation. Strengthening ESG-related training can further enhance employees’ awareness of sustainability. Additionally, a sustainable development performance evaluation system should be implemented. This system should integrate green development goals into corporate management assessments. These measures ensure that corporations achieve economic benefits while fulfilling their environmental responsibilities.

However, the exercise of FEP is still influenced by multiple factors. In China, due to the impact of traditional societal norms, professional women often face greater challenges compared to their counterparts in other countries. For instance, they may encounter promotion barriers when striving for senior management positions. Even after reaching decision-making roles, their voices may still be overlooked in male-dominated corporate environments. These obstacles hinder their contributions to low-carbon transition and sustainable development strategies. Therefore, eliminating these structural barriers requires more than just corporate-level institutional improvements. It demands a collective effort across society, including policy support, corporate culture transformation, and shifts in social perceptions. Achieving true gender-diverse leadership brings more varied perspectives in decision-making, ultimately driving more inclusive and effective sustainability strategies.

Limitations and future research

Several limitations should be acknowledged in this research. First, the calculation of FEP relies on eight secondary indicators. While these indicators are representative, they might not reflect the full dimensionality of FEP. Future research should consider incorporating additional indicators to enhance measurement accuracy. Second, due to data availability constraints, firm-level carbon emissions were inferred from industry-level emissions to compute CCP. While this method is widely used, it may introduce some degree of approximation error. Future studies could explore more precise firm-level carbon emission data to refine the analysis. Third, the exclusive focus on Chinese publicly traded corporations may restrict the extent to which the findings can be generalized to other types of corporations or countries. To enhance generalizability, future studies may consider unlisted corporations and cross-national analyses of FEP’s role in improving CCP under diverse institutional contexts.