The effect of sustainable marketing strategies on firm
performance whilst taking into account the percentage of
females in a board and female CEOs.
Dissertation Dual Award
Maxime Kets
Abstract
With the increasing pressure for firms from stakeholders to implement more sustainable practices, more research on the effects of these practices is needed. This research contributes by showing the effects of certain sustainable marketing strategies on firm performance, while considering the moderator relationships of female CEOs and the percentage of females on the boards. To answer the research question, a sample of 187 companies located in the United Kingdom or Sweden in the financial, healthcare and industry sectors was gathered. Furthermore, several multiple regression analyses were conducted to see whether there was a significant relationship and if this was positive/negative. Additionally, several simple plots were conducted to understand the moderating relationships. The results show a negative significant effect of sustainable marketing practices on the market performance of the firm and a positive effect on the accounting performance of the firm. Even though some results are negative this research provides several arguments as to why sustainable marketing strategies should still be implemented. Additionally, some significant moderating relationships of female CEOs and the percentage of females on the board were found. For instance, boards with 30% of females and lower result in a more positive effect on the relationship between some sustainable marketing strategies and firm performance. Moreover, this research contributes to sustainable marketing research and how certain strategies affect firm performance. Furthermore, this research contributes to the research on gender diversity and why female directors and CEOs are positive for a firm. The results provide some support for the belief that females encourage more sustainable marketing practices.
Keywords: sustainable marketing, gender diversity, board gender diversity, CEO, firm
performance
Acknowledgements:
Table of contents
1. Introduction 4
2. Literature review 7
2.1 Sustainable marketing 7
2.2 Sustainable marketing and firm performance 9
2.3 Gender diversity 11 2.4 Hypothesis development 14 3. Methodology 19 3.1 Research paradigm 19 3.2 Sampling method 19 3.3 Data collection 20
3.4 Data analysis methods 23
4. Findings 26
4.1 Country comparison results 31
5. Discussion 36
5.1 Country comparison 41
5.2 Implications for managers 43
5.3 Limitations and future research 44
6. Conclusion 46
References 48
Appendixes 57
Appendix A Description of variables from database 57
Appendix B Moderation relationships 59
1. Introduction
In his recent book and documentary Attenborough (2020) shows that nature is suffering and that actions need to be taken to save it. Not only is it up to people to recycle and be more sustainable also companies need to change. Therefore, there is more pressure for companies to become sustainable. So, sustainable concerns are becoming more important to protect the environment. Plus, they offer different market opportunities (Leonidou et al., 2013). Additionally, customers are starting to understand the importance of restoring the quality of life. For this reason, they start to look for products and services that do not harm the environment (Ferdous, 2010; Luchs et al., 2010; Chen et al., 2015; Zahid et al., 2017). Resulting in new market opportunities for companies such as producing sustainable products or adapting current products, so they are more sustainable.
As firms start working towards better sustainable performance, not just the products should change, the whole company should change including its marketing. Marketing has a special position in which it can make positive changes to both consumption practices and production. Plus, as a business function, it has the power to create a more sustainable society (Martin and Schouten, 2014). Therefore, more research on sustainable marketing needs to be done. In this research sustainable marketing is defined as; ‘the process of creating, communicating and delivering value to customers in such a way that both natural and human capital are preserved or enhanced throughout’ (Martin and Schouten, p.108, 2014).
marketing spending’s, the effect of certain sustainable marketing strategies on the firm performance was studied.
Furthermore, research has found that firms with a high percentage of females on boards are more concerned with the environment than firms with lower percentages of females on boards. Therefore, they should be considered when aiming for more sustainable marketing in a firm. Besides, there are other various reasons for appointing female directors and CEOs. For instance, they bring diverse opinions, strategic input, influence leadership styles and decision making, improve the image with stakeholders and ensure better boardroom behaviour (Rosener, 1990; Catalyst, 1995; Bilimoria, 2000; Burgess and Tharenou, 2002). However, the opinions are divided on whether or not sustainability and female directors go hand in hand. It is argued that female opinions are still suppressed and therefore, they are not able to express themselves and cannot influence sustainability (Galbreath, 2011). Others find only marginal evidence that females influence positive environmental outcomes (Glass et al., 2016). Additionally, some find that more diverse boards lead to improving sustainable performance in a firm (Ciocirlan and Petterson, 2012; Walls et al 2012; Arayssi et al. 2016).
As the opinions are diverse, and as appointing more females could increase the implementation of sustainable marketing strategies and could increase the firm performance, gender diversity was also included in this research. Specifically, the percentage of females in boards and the gender of the CEOs. For the reason that previous extensive research already found the positive influence of females (in boards and as CEOs) on firm performance (such as Burgess and Tharenou, 2002; Chen et al, 2019), this research did not look for actual effects between the percentage of females in boards, female CEOs and firm performance. Because this research aims to promote sustainable marketing and show firms why they should implement them. Instead, because positive results were found between sustainable practices and gender diversity and firm performance and gender diversity separately, this research considers the percentage of females in boards and female CEOs as moderating variables. The moderating relation of the female CEO was compared to the male CEO.
Everything above led to the following research question: What is the effect of
were created, and several multiple regression analyses were done, also simple slope plots were created to understand the different moderating relationships that were found.
It was found that some sustainable marketing strategies have a negative significant effect on the market performance, however a positive effect on the accounting performance. Additionally, only partial evidence was found that the percentage of females in boards and female CEOs influence the relationship between sustainable marketing strategies and firm performance. Nevertheless, this research contributes to sustainable marketing, firm performance and gender diversity research, in which way will be elaborated more in the rest of this dissertation.
2. Literature review
The following section explains previous research on sustainable marketing, firm performance and gender diversity. Additionally, arguments will be given as to why this research is relevant in general. Furthermore, the hypotheses will be defined, and arguments will be made as to why these hypotheses are included in this research.
2.1 Sustainable marketing
There are many definitions present for the case of sustainable marketing, next to the one used for this study by Martin and Schouten (2014), described in the introduction. For instance, van Dam and Apeldoorn (1996) define it as marketing within and supporting sustainable economic development and it requires acquiring excellent regulatory frameworks that govern the marketing role in a restricted ecological space.
Furthermore, Martin and Schouten (2014) argue that sustainable marketing has two essentials: marketing sustainably and marketing sustainability. The first means creating and backing organizational processes and cultures in a way that leads to environmentally and socially benign marketing processes. The second means promoting and backing a global culture of sustainable consumption as a set of consumption practices, a concept and cultural value.
Additionally, Murphy (2005) considers two definitions of sustainable marketing provided by American authors and European authors. The American view is managerial, and the European view is more broadly oriented. The Americans define it as the action of implementing, controlling and planning the development, promotion, pricing, and distribution of products in a way that satisfies the consumer needs, so that organizational goals are reached and that the process is appropriate for ecosystems (Fuller, 1999). The Europeans define it as the next step ahead with a focus on progress towards greater sustainability, a wide management concept that aims at accomplishing the triple bottom line by designing, making and distributing sustainable solutions with greater net sustainable value while continuing satisfying customers and other stakeholders (Charter et al., 2002).
involves spending energy and time on what happens after the customer consumes the product because marketing responsibilities do not end after the product is sold. Incoherence with this Parguel et al., (2011) find support for Lazer’s (1969) intuition that marketing does not end with the buy-sell transaction and its responsibilities extend way beyond making profits. Marketing must serve both business and the goals of society. Plus, it must act with the interest of the broader public in mind.
Not only are the opinions on defining sustainable marketing divided there are also several synonyms for sustainable marketing available such as green marketing and environmental marketing. However, it has been argued that green marketing is not simply a way to describe sustainable marketing, it is part of sustainable marketing. Gordon et al., (2011) discuss that green marketing is part of the process of ensuring sustainable marketing. The authors conclude that for sustainable marketing to be realized three forms of marketing need to occur: green marketing, social marketing and critical marketing. These three forms must occur in a complicated and strategic effort such that marketing could position sustainability at the core of its theory, principles and practices.
Besides it being essential to establish sustainable marketing, the aforementioned process is important to assure that marketing itself is sustainable and can prosper. Green marketing concerns the development and marketing of sustainable services and products while simultaneously introducing sustainability efforts at the core of business and marketing processes. Whereas social marketing concerns the usage of the power of downstream and upstream marketing interventions to inspire sustainable behaviour. Additionally, critical marketing concerns applying a critical theory-based approach to govern control and regulation and stimulate innovation in markets focused on sustainability and to challenge dominant institutions to create more sustainable marketing disciplines (Gordon et al., 2011).
marketing should commit to finding achievable trade-offs between environmental and business concerns.
Additionally, some sort of control (such as legislation or rigorous intervention, etc.) is essential for sustainable marketing. The form of control will differ per country. This form of control is needed to push companies towards more sustainable practices. Jagidsh and Parvatiyar (2020) agree with this (in line with Lazer, 1969; Murphy, 2005; Parguel et al., 2011) and add that sustainable marketing does not end with handing the product to the customer, companies need to make sure that the packaging of the product is also sustainable so that it does not leave a trace after customers throw away the product. Furthermore, Jagidish and Parvatiyar (2020), advise companies to use four distinct efforts to build a strategy for sustainable marketing. These efforts are promoting responsible consumption, redesigning products and services, recognizing the marketing function and repurposing the marketing mix.
Besides Kotler (2011) argues that companies can change their marketing practices by considering the four p’s; product, price, place and promotion, to change the marketing activity. For instance, creating more eco-friendly products and pricing them according to their level of environmental friendliness. As well as a change to more local production to lower carbon footprints per product or change to online selling so that consumers do not have to get into their cars to buy the product/service. Plus, change from offline promotion towards online promotion and be more specific about the ingredients on the label of the product (Kotler, 2011). Furthermore, they can change their channel of distribution and insist that their suppliers offer more sustainable editions of their products, which they might be able to do for a reasonable price and cost (Murphy, 2005). All these strategies and efforts could be considered when deciding which sustainable marketing strategies to implement. However, most of these strategies have not been empirically tested, that is why this study does test some of the sustainable marketing strategies.
2.2 Sustainable marketing and Firm Performance
the topic is important because still a lot of companies have not committed themselves towards more sustainable marketing practices.
Martin and Schouten (2014) find that odd and raise the question if marketing can help create a more sustainable society why are companies not already implementing it? One barrier they mention is the notion that sustainable practices are too expensive and result in compromising a firm’s competitive place in the market. However, they argue that the opposite is true, and that research has shown that over time sustainable practices strengthen the competitive advantage (Martin and Schouten, 2012).
Besides, other researchers conclude that sustainability and profitability are not mutually exclusive (Bryson and Lombardi, 2009; Barton, 2011; Barton and Wiseman, 2014; Martínez-Ferrero and Frias-Aceítuno, 2014) and that environmental management is beneficial financially (Barton, 2011). Furthermore, results indicate that when companies push for sustainability it reduces material, energy and waste costs, drives innovation, secures resource supplies, reduces risks, retains and attracts talented workers, and strengthens the brand (Martin and Schouten, 2012; Duralia, 2014).
Jagidsh and Parvatiyar (2020) find other evidence about why marketing sustainability does not negatively affect the profitability of a firm. According to them, innovation is crucial for marketing, however, innovation for sustainable development is likely to result in the highest payoffs for any company. Nevertheless, companies must be willing to work towards long-term profits and not short-term profits, because sustainable practices are more profitable in the long-term than short-long-term (Ortiz-de-Mandojana and Bansal, 2016).
Furthermore, lots of research has been focused on the effect of environmentally responsible practices on firm performance and they found that environmentally responsible practices are consistent with and beneficial for firm performance (Al-Najjar and Anfimiadou, 2012; Boiral et al., 2012; Xu et al., 2014). Additionally, Keszey (2020) finds that environmental marketing results in better export and that it positively influences the financial and market performance of a firm. Along with that, she finds that top-level management involvement is needed to stimulate more sustainability initiatives. Plus, companies are more inclined to implement environmental marketing and sustainability initiatives, when their competitors are also implementing them. As well as, when they are legally pressured into implementing them. As sustainable marketing also includes environmentally responsible practices (van Dam and Apeldoorn,1996) the assumption is made that within this research it will also be found that sustainable marketing practices are beneficial for firm performance.
2.3 Gender diversity
In the present study gender diversity includes the percentage of females in boards and female CEOs. Attention is paid towards gender-diverse boards because several studies found that more diverse boards lead to more environmentally pursued behaviours (Webb, 2004; Post et al., 2011). With gender-diverse boards is meant the percentage of females that are in the board. Next to that, the board is the ultimate decision-making group within a firm (Hendry and Kiel, 2004). They hold considerable responsibility and power in overlooking firms and they have a significant influence on strategy, which affects performance (Fama and Jensen, 1983 a,b; Hillman, et al., 2001; Lynall, et al., 2003). Also, they play an important role in shaping environmental strategy (Glass et al., 2016). Plus, they have compelling influence over environmental policies and methods (Walls et al., 2012) and more diverse boards leads to more sustainable performance in a firm (Ciocirlan and Petterson, 2012; Walls et al., 2012; Arayssi et al., 2016). Therefore, deciding the right composition of board members is of critical importance.
On the other hand, Glass et al., (2016) find an association between gender-diverse boards and positive environmental outcomes, but this is only marginal. They conclude that diversity among and between leadership teams is critical and that gender-diverse boards are especially important when there is a male CEO because this way, they are still able to advance environmental strengths. In the same year, Kassinis et al., (2016) do find that firms with a higher percentage of female directors are more concerned with the environment than firms with a lower percentage of female directors.
The opinions and previous results on this topic are diverse. Therefore, it is a good idea to test the topic again. Plus, none of them checks whether or not gender diverse boards also inspire more sustainable marketing they solely consider the subject of environmental sustainability.
Furthermore, studies have found some advantages of putting women on boards such as they provide a different perspective to decision-making and board processes, different skills and experiences which may empower the board to more adequately concentrate on addressing different stakeholder demands (Bilimoria and Wheeler, 2000; Hillman et al., 2002; Carter et al., 2003; Singh et al., 2008; Miller and del Carmen Triana, 2009; Nielsen and Huse, 2010). However, others suggest that diversity is double-edged; it can either strengthen or block strategic change and decision making depending on firm performance and the power women directors have (Triana et al., 2014).
Gender diverse boards have been found significantly associated with both sustainable performance and firm performance. However, the effect of gender-diverse boards on the relationship between sustainable and firm performance has not been studied yet. Rehman, Orij and Khan (2020), argue that to understand when more environmental performance is generated. One must understand the effect of environmental performance on firm performance. However, as it has been found that gender diversity positively influences both environmental performance and firm performance separately, the authors decided to investigate the moderation of gender diversity on this relationship. They define gender diversity as the percentage of females in boards and female/male CEOs. They find that gender diversity in a firm positively moderates the relationship between environmental performance and firm performance.
As sustainable performance involves environmental performance, and sustainable marketing practices are implemented to improve this performance, the assumption is made that the relationship between sustainable marketing and firm performance may also be influenced by gender-diverse boards. Therefore, the present study decided to also investigate the moderating effects of percentages of females in boards on the relationships between sustainable marketing strategies and firm performance. Therefore, assuming that female voices are heard in board meetings and considering the social role theory, where women are believed to be more concerned with the community, one may assume that when there is a diverse board, this will influence the relationship between sustainable marketing and firm performance. Especially in times like these where there is a force towards sustainability to improve life for future generations.
Furthermore, ‘Female CEO’ is included as a moderating variable, as previous research already found that female CEOs have an effect on sustainable marketing practices and firm performance, separately. However, most do not investigate the moderating relationship of Female CEOs and whether female CEOs are more positive for the relationship between sustainable marketing practices and firm performance than male CEOs.
CEO generates. Women are believed to be more concerned with the community and men more agentic, which means they have less concern for actions or responsibility they mostly follow orders. Also, women are believed to have more empathy and therefore will more often go for sustainable investment and stimulate sustainable behaviour in a company than male CEOs (Bakan, 1966).
Plus, survey research has shown that women are more committed towards the environment and are more likely to choose environmental responsible practices even when they are more costly (Hunter et al. 2004; Zahran et al. 2006). Besides, women are believed to be more long-term focused and more concerned with stakeholders even when this means losing short-term profits (Silverman, 2003; Matsa and Miller, 2013). A stakeholder focused leadership within a firm leads to more environmentally friendly practices (Dyllick and Hockerts, 2002), which are needed to encourage sustainable marketing. Therefore, the assumption is made that, female CEOs will have a more positive influence on the relationship between sustainable marketing and firm performance, than male CEOs.
Furthermore, Glass et al. (2016) do not find a significant relationship between female CEOs and increasing environmental practices. However, the study only considered the fortune 500 companies and only focused on environmental strengths and weaknesses. Also, none of them includes female CEOs as a moderating variable. Rehman, Orij and Khan (2020), do include female CEOs as moderating variable and they find a positive moderating effect. However, they studied this moderating effect on the relationship between ‘environmental performance’ and ‘firm performance’, they did not study sustainable marketing. Therefore, testing this another time only then with sustainable marketing practices may again show a significant moderating effect of female CEOs, or a different effect, on the relationship between sustainable marketing and firm performance.
2.4 Hypothesis development
Considering that sustainable practices generate long-term profits, companies must be willing to work towards long-term profits and not short-term (Ortiz-de-Mandojana and Bansal, 2016). However, most of the companies still think that one cannot be sustainable and have profits at the same time (Martin and Schouten, 2014). Therefore, to get companies to implement more sustainable marketing strategies, the effect of them on firm performance is important to illustrate.
Moreover, most of these studies did not focus on sustainable marketing strategies or did not empirically test this relationship. Also, when they did include sustainable marketing, they either used a different sample including companies from different countries, or they used different indicators for sustainable marketing such as green marketing or sustainable marketing spendings, or they did not empirically test the effects of sustainable marketing. Therefore, testing this relationship again could lead to different conclusions. Plus, as the importance of sustainable marketing is growing (Mittelstaedt et al., 2014) more research on the effects of sustainable marketing strategies could benefit firms. Furthermore, as sustainable practices are associated with sustainable marketing and these practices have been found positively linked with firm performance (Bryson and Lombardi, 2009; Barton and Wiseman, 2014; Martínez-Ferrero and Frias-Aceítuno, 2014), the same will be assumed for this study. Leading to the following hypothesis:
H1: Sustainable marketing strategies positively influence firm performance
Furthermore, boards have a great influence on firms because they have a significant influence on strategy, which affects performance (Lynall, et al., 2003). For that reason, they can stimulate the firm to implement more sustainable marketing practices. Also, previous research found that female directors are believed to have lower power orientation and higher universalism (showing tolerance, understanding and protecting the welfare of nature and all people) compared to males and are, therefore, more concerned for stakeholders than male directors (Adams and Funk, 2012). As mentioned above, a concern for stakeholders results in more environmentally friendly practices (Dyllick and Hockerts, 2002), and these are needed to encourage sustainable marketing.
2015). Plus, other researchers found that gender-diverse boards encourage more positive environmental outcomes (e.g., Kassinis et al., 2016). Additionally, it is especially important to have a gender-diverse board when the CEO is male (Glass et al., 2016) because this way female directors are still able to advocate for more sustainable practices.
Considering that female and male directors have different cognitive frames and that these frames influence firm performance (Hambrick, 2007), diverse boards result in better firm performance (Post and Byron, 2015). Due to these different cognitive frames, there are differences in the way male and female directors influence firms. As mentioned above female directors are more likely to advocate for more sustainable practices compared to male directors.
None of the research mentioned above included the moderating effects of the percentage of females on the relationship between sustainable marketing practices and firm performance. They either involved the separate relationships between gender-diverse boards and sustainable marketing or gender diverse boards and firm performance. Rehman, Orij and Khan (2020) argue that it is important to understand this moderating variable and that previous research has not studied this yet. Present research fills this gap, by using the percentage of females in boards as a moderating variable.
Furthermore, because for both relationships already significant effects have been found, this study is interested whether the percentage of females in boards also moderates the relationship between sustainable marketing and firm performance. Also, to see whether more percentages of females in boards could help in arguing for more sustainable marketing. As mostly positive effects have been found present study also expects to find a positive effect. Plus, Rehman, Orij and Khan (2020), found that the higher the percentage of females on boards, the better a firm will perform environmentally. As this is part of a firm's sustainable performance, and sustainable marketing strategies are implemented to improve this performance, present research expects to find the same moderating results. For these reasons the following hypothesis will be tested:
H2: The relationship between sustainable marketing strategies and firm performance is more positively influenced by a higher percentage of females in boards than with a lower
Earlier research found that CEO power positively influences the performance of the firm (Daily and Johnson, 1997). As mentioned above there are different characteristics for male and female CEOs. Female CEOs are believed to be more likely to implement and stimulate sustainable behaviour within a firm (Bakan, 1996) and that they are more committed towards the environment even when these practices are more costly (Hunter et al., 2004; Zahran et al., 2006). Plus, women are more long-term focused and concerned with stakeholders (Silverman, 2003; Matsa and Miller, 2013), which are all characteristics needed to stimulate sustainable marketing. As these characteristics could stimulate more sustainable marketing and as sustainable marketing practices are believed to generate better performance for the firm in the long-term, this study investigates whether female CEOs more positively moderate the relationship between sustainable marketing practices and firm performance than male CEOs.
By investigating this, this study fills a gap in research, because according to Rehman, Orij and Khan (2020) this moderating effect is crucial in understanding the relationship between sustainable performance and firm performance, however most studies forget to include this moderation. When this moderating relation exists, it could provide companies with another reason why they should aim for hiring a female CEO or more female directors in their firm. Moreover, as sustainable marketing is becoming more important in business nowadays (Mittelstaedt et al., 2014), it is getting more important to find ways that increase sustainable marketing practices in firms.
Rehman, Orij and Khan (2020) did include female CEOs as moderating variable, however, they moderated it in the relationship between environmental performance and firm performance. As mentioned above, environmental performance is part of sustainable performance. Therefore, it is assumed that when investigating the moderating effect again, the same results might appear. However, this time the moderating effect will be tested on the relationship between sustainable marketing and firm performance. The same results might occur as both variables are involved in sustainable performance. Therefore, this study expects to find a positive moderating relationship. Resulting in the following hypothesis:
All the above resulted in the conceptual model illustrated in Figure 2.1.
3. Methodology
The following section elaborates on the research paradigm, the sampling methods used, how the data was collected and the analysing methods.
3.1 Research Paradigm
In research methodology, there are two main research paradigms ‘Interpretivism’ and ‘Positivism’. Positivism is based on the idea that reality is separate from us and that theories can only be discovered based on empirical proof. Therefore, when using this paradigm quantitative measures should be used (Collis and Hussey, 2014). Interpretivism is focused on understanding what is happening in a situation instead of simply measuring it (Patton, 1990; Klein and Myers, 1999). It is believed that a social context cannot be measured since it is subjective and shaped by our interpretations. For this paradigm, qualitative measures of analysis should be used (Collis and Hussey, 2014). The following research will follow a positive paradigm strategy where hypotheses will be developed and there will be looked for correlations (O’Gorman and MacIntosh, 2015).
3.2 Sampling Method
When choosing between using primary or secondary data one is not necessarily better than the other, it depends on the research. Primary data could lead to more insightful and original ideas. However, secondary data can be valuable and is a cost-effective resource and several successful studies used secondary data as the primary source of information in their research (Papachroni and Lochrie, 2015). In this research, due to the COVID-19 pandemic and due to limited time and resources only secondary data has been used. The secondary data was collected using mainly the Thomson Reuters Eikon database and WRDS BoardEx. The sample was collected using a non-probability sampling technique which involves a sample chosen based on certain characteristics or similar differentiating features relevant for the particular study. The type of non-probability sampling used was purposive sampling where the researcher decides who/what study units will be included (Taheri, et al., 2015). The companies included in the sample were found in the Thomson Reuters Eikon database by using the filter option.
United Nations (2020). These goals are aimed at improving the world we live in and making sure that future generations can still live on earth. As members are urged to improve the sustainable performance of the firm the assumption is made that most companies with already implemented sustainable marketing practices will be found in this group.
However, as the UN has currently 193 members (United Nations, 2020b) it is too extensive to use all members therefore two countries were chosen. Sweden and the United Kingdom because they both scored highly on both the Gender Equality Index (GEI) of the European Institute for gender equality (EIGE, 2019) and the Environmental Performance Index (EPI, 2020). Both indexes were used because they indicate activities in countries which are relevant for this study and thus the assumption was made that by using highly ranked countries on these indexes would lead to a large sample of companies who have both gender-diverse boards and implemented sustainable marketing practices. Which are needed to answer the research question.
The second filter was that a company needed to have a percentage of females in their boards, and this led the focus on Industrials, Healthcare and Financial sectors because these had the highest levels of board diversity according to the Database. After applying these filters, the current sample included 289 companies. Later, when searching for data for the variables was completed, another five companies were excluded, because no information on the variables was found, resulting in a finale sample of 284 companies. This sample was inserted into STATA. However, when conducting the regressions this sample reduced to 187 companies.
3.3 Data Collection
Most data were collected from the Thomson Reuters Eikon database, for the reasons that it has been used by other researchers (Ioannou and Serafeim, 2012; Pätäri et al., 2012; Cheng et al., 2014; Eccles et al. 2014; Kassinis, 2016) and it includes both information about firm performance and sustainable strategies in companies. Appendix A provides a description of all the variables collected from the Thomson Reuters Eikon database.
Independent Variables
effects of sustainable marketing on firm performance are not visible in the short-term, they might take a while (Martin and Schouten, 2012). Therefore, the data for the dependent variable will be from 2019 to better show the overall effect.
In the present sample, no company reports its actual sustainable marketing spending or activity per year. Plus, acquiring this data was beyond the limits of this research, therefore it was impossible to include this in the sample. Consequently, another strategy to gather data on sustainable marketing had to be used. Guided by other researchers (Pan et al. 2007; Sirgy et al., 2012; Kassinis, 2016; Taoketao et al., 2018) indicators for the variable were used. Besides, sustainable marketing is more than only the marketing expenses and promotion (Murphy, 2005; Jagidsh and Parvatiyar, 2020). Therefore, sustainable marketing strategies were used to indicate that there is a sustainable marketing activity within the company and the effects of these strategies on the firm performance was tested. These strategies were found in the Thomson Reuters Eikon database and the strategies were chosen based on definitions and examples described in the literature review. Initially, six sustainable marketing strategies were found in the database and used for testing. However, in the end, only three were used. Three were excluded because they had either a lot of missing values or they were not applicable for the companies in the sample.
The three that were included are: First, ‘Product Environmental Responsible Use’, which indicated whether or not companies have product/service applications and features that promote responsible efficient, cost-effective and environmentally preferable use. In line with Murphy (2005) and Jagidsh and Parvatiyar (2020), this is a sustainable marketing strategy therefore it was included in this research. Second, ‘Supplier ESG Training’ indicates whether or not companies provide training in sustainable factors for its suppliers, which is a strategy to make the marketing mix more sustainable (Murphy, 2005; Kotler, 2011; Jagidsh and Parvatiyar, 2020). Lastly, ‘Environmental Products’ indicates whether the company has a product line or service that is created to positively influence the environment, or which is environmentally marketed and labelled.
Moderator variables
‘Gender CEO’ and ‘Percentage of females in boards’ were included as moderator variables. The data for the variable ‘Gender CEO’ was collected from the WRDS BoardEx database. The variable was named ‘Gender CEO’ as both female CEOs and male CEOs are included in this variable. To use this variable for statistical testing it had to be numbered (Chatterjee and Hadi, 2012). Therefore, 1 indicates ‘female’ and 0 indicates ‘male’ CEO.
Furthermore, the data for the variable ‘%Females in boards’ was found in the Thomson Reuters Eikon database. This variable indicates the percentage of female board directors in the different companies. This data did not have to be adjusted, as the percentages were already acquired from the database.
Dependent Variable
Firm performance is included as the dependent variable in this research. Firm performance can be measured in several ways for example previous research has used ‘Return on Assets’ and ‘Return on Investment’ as indicators because these are mostly used by market and financial analysts when assessing a firm’s performance (e.g., Shrader et al., 1997; Erhardt et al., 2003). However, some criticize this way of testing they argue that accounting rates provide a misleading image because they do not consider differences in risk and disequilibrium effects (Benston, 1985). Therefore, others choose to use the Tobin’s Q measure. However, for a complete view, some used both and defined the first as accounting measures of performance and the later as market performance measures (Daily and Johnson, 1997; Chabowski, 2011; Vardarajan, 2017; Hussain et al., 2018).
Control Variables
Based on previous research on firm performance, sustainable marketing and gender diversity research, several control variables were included to avoid biased or misdirected results. For the CEO-level measures, there was controlled for the tenure of the CEO, because this can affect the performance of a CEO (García-Sánchez, et al., 2020). The tenure of the CEO was measured as the number of years the current CEO has been in this position at the firm.
For the board level measures, there was controlled for the board size (Glass and Cook, 2018), because large boards could experience problems such as poor communication and decision-making that hurts their efficiency (Arayssi, et al., 2016). Furthermore, when small boards have only 2 members and 1 female member is added, the increase in board gender diversity is much larger than when 1 female member is added on a larger board, while the effect might be the same (Adams and Ferreira, 2009). The board size was measured as the total number of board members at the end of the fiscal year.
For firm performance, there was controlled for the firm size, because this can affect the performance. The total assets (Kassinis, 2016) were used to control for this. The total assets were measured as the total assets of a firm at the end of the fiscal year.
3.4 Data Analysis Methods
To answer the research question, a correlation analysis has to be done, which examines the connection and relationship between two variables. Furthermore, several multiple regression analyses have to be performed, which examine whether or not there is a relationship between one dependent variable and multiple independent variables (Taheri et al., 2015b).
test for heteroscedasticity was done and this showed that the heteroscedasticity was now eliminated.
Furthermore, a Shapiro-Wilk test for normal data was performed and most data had a p-value < 0.05 indicating that the data was normally distributed. Next, there was tested for multicollinearity and the variables ‘Product Environmental Responsible Use’ and ‘Environmental Products’ both had high VIF scores as indicated in Table 3.1. However, after leaving out one of the two variables the multicollinearity was gone, as indicated by tables 3.1a & 3.1b. As both variables are dichotomy variables using a log is not possible. Plus, to decide which one to leave out was difficult. Therefore, two separate regression analyses were performed one with ‘Environmental Products’ and one with ‘Product Environmental Responsible Use’. ‘Supplier ESG Training’ was used in both regressions and the dependent variable was also the same in both regressions. Furthermore, all the other variables had VIF’s around 1, indicating that multicollinearity is not a problem for this research.
Table 3.1: VIF results
Table 3.1b: VIF after leaving out ‘Environmental Products’
To test H1 multiple regression analyses were performed between sustainable marketing indicators and firm performance and there was controlled for firm size, board size and CEO Tenure. To test H2 and H3, additional multiple regressions with moderate variables were completed and the same control variables were added. The next chapter will elaborate on these tests and their results.
4. Findings
The following section first shows the descriptive statistics and the correlation matrix. Then a thorough explanation of the results from the regression analysis of the sample are given. Lastly, the results of the split sample regression analysis are described.
The descriptive statistics and correlation matrix are both visible in Table 4.1. As indicated by this table, the final sample is made of 187 observations. However, this study used different dependent variables and these variables have different sizes. Therefore, the sample size depends on the dependent variable used for the regression. So, when ‘Tobin’s Q’ is the dependent variable N= 187. When ‘Return on Assets’ is the dependent variable N= 154, and when ‘Return on Equity’ is the dependent variable N=145. Additionally, it should be noted that a log variable of ‘Tobin’s Q’, ‘Return on Assets’ and ‘Return on Equity’ has been used to generate a more normal distribution. The correlation matrix indicates the correlations between the different variables.
Table 4.1: Descriptive statistics and correlation matrix
To test hypothesis one, six regressions were performed to indicate the relationship between the three independent variables and the different performance variables and whether there even is a relationship. The first and second regression included ‘Supplier ESG Training’ and ‘Tobin’s Q’. Plus, the control variables ‘Total Assets’, ‘Board Size’ and ‘CEO Tenure’. The only difference is that in the first (table 4.2, model 1) also ‘Environmental Products’ (EP) was added and in the second regression (table 4.2, model 4) instead ‘Product Environmental Responsible Use’ (PERU) was used. The same method was applied for regression 3 (table 4.3, model 1) and 4 (table 4.3, model 4) only this time ‘return on assets’ was used as the dependent variable. Again, with regression 5 (table 4.4, model 1) and 6 (table 4.4, model 4), the same method was applied and this time ‘return on equity’ was included as the dependent variable.
Variable Observations Mean Std. Dev. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) 1. Tobin's Q¹ 187 -0.78 2.38 1
2. Return on Assets¹ 154 1.30 1.39 0.472*** 1
3. Return on Equity¹ 145 2.75 0.73 0.144 0.407*** 1
4. Environmental Products 187 0.4117647 0.49 -0.220* -0.0875 0.0309 1
5. Supplier ESG Training 187 0.1550802 0.36 -0.176* 0.0506 0.109 0.173 1
6. Product Environmental Responsible Use 187 0.4278075 0.50 -0.193* -0.0683 0.0378 0.984*** 0.166 1 7. %Females in boards 187 25.35 11.56 -0.0846 0.00538 0.123 0.144 0.159 0.125 1 8. Gender CEO 187 0.0802139 0.27 -0.190* -0.105 0.112 0.00455 0.176* 0 0.202* 1 9. Total Assets 187 68134.02 276002.90 -0.552*** -0.450*** -0.150 0.252** -0.0282 0.247** 0.0135 0.102 1 10. Board Size 187 8.87 2.48 -0.529*** -0.255** -0.0428 0.212* 0.148 0.195* 0.138 0.110 0.451*** 1 11. CEOTenure 187 5.68 6.72 0.246** 0.0879 0.0114 -0.0629 0.0973 -0.0171 -0.0803 -0.142 -0.0862 -0.172 1
After the first regression, it was visible that ‘Supplier ESG Training’ has a negative effect, with a 5%- significance level, on the ‘Tobin’s Q’ (table 4.2, model 1). A negative significant effect means that if one rises the other decreases and the other way around. ‘Environmental Products’ did not have a significant effect on ‘Tobin’s Q’. The second regression indicated again a negative significant relationship between ‘Supplier ESG Training’ and ‘Tobin’s Q’. However, ‘Product Environmental Responsible Use’ did not have a significant effect on Tobin’s Q (table 4.2, model 4).
The third regression showed no significant relationship between any of the sustainable marketing strategies and return on assets (table 4.3, model 1). The fourth regression did not indicate a significant relationship between sustainable marketing strategies and return on assets either (table 4.3, model 4). The fifth (table 4.4, model 1) and sixth regression (table 4.4, model 4) again showed no significant relationship between any of the sustainable marketing strategies and return on equity.
To test for hypothesis two, six regression analyses (results are visible in tables 4.2-4.4, models 2&5) were completed. These regressions included ‘Percentage of females in boards’ as moderator, next to the variables already mentioned for hypothesis one. Three different regression analyses were performed, because three different dependent variables had to be used to test firm performance and the variables ‘Product Environmental Responsible Use’ and ‘Environmental Product’ had to be tested in different regressions.
and Tobin’s Q. Furthermore, again a significant moderation of ‘Percentage of females in boards’ on the relationship between ‘Supplier ESG Training’ and ‘Tobin’s Q’ was found.
Interesting is that when testing for H1 no significant relationships between the sustainable marketing strategies and return on assets were found, however when adding the ‘Percentage of females in boards’ as moderator, a significant effect was found (table 4.3, model 2). This was a slight significant relationship between ‘Supplier ESG Training’ and ‘Return on Assets’, on a 10%-significance level, the p-value is 0.054 and this is a positive relationship. Which is the opposite effect than that was found with ‘Tobin’s Q’ as the dependent variable. Additionally, the model showed no indications of significant moderating relationships. The fourth regression (table 4.3, model 5) again indicated a slight significant relationship between ‘Supplier ESG Training’ and ‘Return on Assets’. However, no significant moderating relationships were visible.
The fifth regression (table 4.4, model 2) showed a significant relationship (0.008) between ‘Environmental Product’ and ‘Return on Equity’. Furthermore, it showed a significant positive relationship (0.025) between ‘Percentage of females in boards’ and ‘Return on Equity’. Also, a significant moderating effect (p-value = 0.011) of ‘Percentage of females in boards’ was found on the relationship between ‘Environmental Products’ and ‘Return on Equity’. After plotting a simple slope (Appendix B.1b) it was visible that the effect of ‘Percentage of females in boards’ on the relationship between ‘Environmental Products’ and ‘Return on Equity’ is negative with a high percentage of female board members and positive with a low percentage of female board members. This relationship is positively affected up until when a board has around 30% female board members after this threshold the relationship is negatively affected. Furthermore, no significant moderating relationships were found.
members. The graph indicates that the relationship is positively affected until a board has around 30% female board members after this threshold the relationship is negatively affected.
To test for hypothesis three, six regression analyses were done (results are visible in tables 4.2-4.4, models 3 and 6), the same way as explained above only this time the variable ‘Gender CEO’ was included as moderator and the same control variables were used.
The first regression (table 4.2, model 3) indicates that ‘Supplier ESG Training’ still has a negative significant relationship with ‘Tobin’s Q’. The negative relationship between ‘Environmental Products’ and ‘Tobin’s Q’ is not significant. However, the gender of the CEO does influence the relationship between ‘Environmental Products’ and the ‘Tobin’s Q’ with a p-value of 0.006. The simple slope plot method of Aiken and West (1991) was used to illustrate the effect of the moderation (Fock et al., 2013) and this indicated that the relationship between ‘Environmental Products’ and ‘Tobin’s Q’ is negatively affected by both a male and female CEO. However, this effect is more negative when there is a female CEO than when there is a male CEO (see Appendix B.2a). Additionally, no other significant moderating relationships were found.
The second regression (table 4.2, model 6) showed again a significant negative effect between ‘Supplier ESG training’ and ‘Tobin’s Q’. Between ‘Product Environmental Responsible Use’ and ‘Tobin’s Q’ is no significant relationship visible. However, the ‘Gender of the CEO’ significantly moderates this relationship (0.004). To understand the effect of this moderation another simple slope plot (see Appendix B.2b) was performed. This showed that the moderation is again negative. Indicating that both male and female CEOs have a negative effect on the relationship between ‘Product Environmental Responsible Use’ and ‘Tobin’s Q’. However, this effect is more negative with a female CEO than with a male CEO.
In conclusion, some evidence was found to support a relationship between the marketing strategies and the market performance (Tobin’s Q), however, this relationship was negative. For the accounting performance, some positive significant relationships were found, however only when the ‘percentage of females in boards’ was included as moderator. As the desire was to find a positive relationship between all the sustainable marketing strategies and firm performance hypothesis one is only partly supported.
For hypothesis two, some evidence was found indicating a moderating effect of ‘Percentages of females in boards’ on some relationship. However, this was only significant for the relationships between: ‘Supplier ESG Training’ and the ‘Tobin’s Q’; ‘Environmental Products’ and ‘Return on Equity’; ‘Product Environmental Responsible Use’ and ‘Return on Equity’. Thus, a significant moderator was found in three out of nine relationships. However, to support hypothesis two, the relationship between sustainable marketing and firm performance should be positively influenced by a higher percentage of females on boards. As indicated above this is not shown in the results. The results illustrate a negative effect on the relationship between ‘Supplier ESG Training’ and ‘Tobin’s Q’. Plus, a negative effect on the relationship between ‘Environmental Products’ and ‘Return on Equity’ and ‘Product Environmental Responsible Use’ and ‘Return on Equity’, with higher percentages of females in boards. However, this effect was positive with lower percentages of females on boards. Therefore, hypothesis two cannot be supported.
4.1 Country Comparison
As visible in Table 4.5, Sweden model 1, when regressing the sustainable marketing strategies on the dependent variable ‘Tobin’s Q’ no significant relationships were found in the Swedish companies. However, when doing the same for the United Kingdom companies (Table 4.5, UK model 1), both ‘Environmental Products’ and ‘Supplier ESG Training’ had a negative significant relationship with the ‘Tobin’s Q’ with a 10% significance level.
Interestingly, when including the ‘Percentage of females in boards’ as moderator, a significant relationship between ‘Environmental Products’ and the ‘Tobin’s Q’ was found in the Swedish companies (Table 4.5, Sweden model 2). Additionally, a negative significant relationship between ‘Percentage of females in boards’ and ‘Tobin’s Q’ was found for the Swedish companies. Also, a significant moderation of ‘Percentage of females in boards’ on the relationship between ‘Environmental Products’ and ‘Tobin’s Q’ was found. A simple slope plot was made to indicate the effect of this relationship (visible in Appendix B3).
This indicated that with low percentages of females in boards the relationship is negatively affected, however with higher percentages of females in boards the relationship is slightly more positively affected. As visible in the graph from around 40% of females in boards, turns the negative effect in a positive effect on the relationship between ‘Environmental Products and ‘Tobin’s Q’. Indicating that higher percentages of females in boards more positively affect this relationship than lower percentages. For the companies from the United Kingdom no significant effects were found (table 4.5, UK model 2).
21 22
Table 4.2: Regression
23
analyses results with
24 Tobin’s Q as the 25 dependent variable 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Model 1 2 3 4 5 6 Independent Variables
Environmental Products (EP) -0.359 -0.679 -0.293 (0.282) (0.690) (0.291)
Table 4.3: Regression
50
analysis results with
51 Return on Assets as 52 the dependent 53 variable 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 Model 1 2 3 4 5 6 Independent Variables
Environmental Products (EP) -0.0821 -0.134 -0.0178 (0.209) (0.451) (0.211)
92 93 94 Table 4.4: 95 Regression analysis 96
results with Return
97 on Equity as the 98 dependent variable 99 100 Model 1 2 3 4 5 6 Independent Variables
Environmental Products (EP) -0.00301 0.849*** 0.0641 (0.118) (0.317) (0.117)
101 Table 4.5: Split 102 sample regression 103 analyses results 104
Country Sweden United Kingdom
Model 1 2 3 1 2 3
Independent Variables
36
5. Discussion
This study aimed to find if there is a relationship between sustainable marketing strategies and firm performance, whilst taking into account the percentage of females on boards and the gender of the CEO. The results showed that there is a relationship between the dependent and the independent variables (H1). However, for this particular sample, this relationship turned out to be negative for the market performance (Tobin’s Q) and positive for the accounting measures (ROA & ROE). Furthermore, only partial support was found that the percentage of females in boards (H2) and the female CEOs (H3) moderate this relationship. However, this was negative with higher percentages of females in boards and with a female CEO, and not positive as expected. Therefore, hypothesis two and three could not be supported. In the following section, these results will be discussed.
In recap, hypotheses one stated that sustainable marketing strategies positively influence firm performance. Due to the results of several studies (Sheth and Parvatiyar, 1995; van Dam and Apeldoorn, 1996; Polonsky and Rosenberger, 2001; Holliday, Schmidheiny and Watts, 2002; Varey, 2010; Hunt, 2011; Mittelstaedt et al., 2014; Prothero and McDonagh, 2015), this study was created around the assumption that sustainable marketing strategies have a positive effect on the firm’s performance. However, the results of this study’s regressions analyses, find a negative effect on market performance (Tobin’s Q). For the accounting measures, some positive relationships were found. Therefore, not only a positive association on the overall firm performance was found, but also a negative association.
37 Furthermore, the results illustrate that ‘Supplier ESG Training’ has a strong negative effect on market performance. In hindsight, this finding is not surprising because this strategy includes having to change people’s actual business practices. Not every supplier will be open towards this. People tend not to be happy about changing their behaviours, there might be denial or refusal to accept changes or information that they did not ask for (Barr et al.,1992). Also, it has been found that there occurs more refusal to change when it’s concerning a strategic change (Pardo del Val and Martínez-Fuentez, 2003).
Additionally, ‘Supplier ESG training’ is a fairly expensive training, therefore it is reasonable that in the beginning, this strategy affects the company negatively before it starts to be fruitful. However, once suppliers are educated and they start implementing more sustainable practices that are efficient, they might be able to provide the companies with more efficient sustainable products/parts/services. Which could eventually make the whole process less expensive. This could result in better prices for their customers and that might eventually lead to better firm performance. Hence, just because the short-term performance does not show positive results, it does not mean there might not be positive results in the long-term (Ortiz-de-Mandojana and Bansal, 2016).
For the accounting measures of firm performance, no significant correlations were found when testing the strategies alone on performance. However, when adding the percentage of females in boards as moderator, a significant positive effect is found. For instance, when adding the interacting effects of ‘percentage of females in boards’, a positive significant effect of ‘Supplier ESG training’ on ‘Return on Assets’ is found. This is the only significant effect found with ‘Return on Assets’ as the dependent variable. This indicates that ‘Supplier ESG Training’ only has a positive effect on the ‘return on assets’ when the moderator ‘percentage of females in boards’ is added. Which hints that females in the board are needed for ‘Supplier ESG Training’ to positively affect the ‘Return on Assets’. However, no significant moderator relationship was found in this study. Nonetheless, with a bigger sample a different effect might be found. Therefore, more research on this relationship should be completed to make better conclusions.
38 Equity’ when the moderator ‘Percentage of females in boards’ is added. Which hints in the direction that the finding of previous research (e.g., Ciocirlan and Petterson, 2012; Walls et al., 2012; Arayssi et al., 2016), that females in boards result in more sustainable marketing and that this is more positive for firm performance, might be true for this study. Additionally, a positive effect of the percentage of females in boards on the return on equity is visible in this model. Plus, a significant moderation is found in this model. Which all indicates that environmental products and percentage of females in boards are both positive for the return on equity. These results confirm what previous research already found (Carpenter, 2002; Erhardt et al., 2003; Post and Byron, 2015) that females in boards lead to better financial performance.
Additionally, the findings show that when there are positive significant relationships these are in combination with accounting measures (ROA and ROE) as the dependent variable. However, when the market measure is the dependent variable only negative significant relationships are found. The divergent results are because the accounting measures and market measures have been found negatively correlated, so when one increases the other decreases (Keats and Hitt, 1988; Nelson, 2003). However, both can be used in research as indicators of firm performance when they are measured separately and when their results are explained separately (Gentry and Shen, 2010).
In recap hypothesis two, was created to find out whether or not the relationship between sustainable marketing strategies and firm performance is positively influenced by a high percentage of females on boards. The results indicated three significant moderating relationships.
39 Additionally, it can be a risky strategy because when suppliers are not open to this you might lose them, which is something males are less concerned with than females (Chen et al., 2019). Plus, Hillman et al (2002) find that more salient individuals are seen as more influential, therefore as females are mostly a minority on the board (Adams and Ferreira, 2009) and the pressure for companies to increase their board diversity, female board directors are likely seen as more salient in the present sample when there is a lower percentage of females in the board (Chen et al. 2019). Which could indicate why fewer females on the boards are slightly better for this relationship then more females on the board.
The second significant moderation was on the relationship between environmental products and return on equity. This effect is negative with a high percentage of females on the board and positive with a low percentage of females on the board. Additionally, the third significant moderation was found for the relationship between ‘Product Environmental Responsible Use’ and ‘Return on Equity’. This moderation was similar to the second moderation.
An explanation for these results is provided by Galbreath (2011), in his article, he states that female directors are often discounted by males and their opinions are not heard. Besides, the number of females on the board is not important, the power one female board director has is more important (Cook and Glass, 2015). The countries in the present sample have to work towards implementing all the sustainable development goals designed by the United Nations (2020), one of these goals is gender equality. It could be that the companies in the present sample are trying to reach a certain quota, which could result in females being appointed for the wrong reasons (Cook and Glass, 2015). If a female is appointed simply to reach a quota this could again, result in them having no actual power to change a company’s strategies.
40 weak governance. Also, the advantages from gender-diverse boards come from combining different expertise, backgrounds and points of views so that better/different decisions can be made. When adding too many females to the equation the diversity decreases and the advantage turns into a disadvantage (Ellemers, et al. 2012). Frink et al. (2003) demonstrate that the recipe for success is not just adding women to the mix and stirring, the success stops when an equal number of men and woman is reached.
Thus, in some cases, the percentage of females on the board does positively affect the relationship between sustainable marketing and firm performance (H2). However, this is only positive with low percentages of females on boards. Nevertheless, the fact that a positive moderation was found can be used to advocate for the argument that females in boards are needed to generate more sustainable marketing practices (Ciocirlan and Petterson, 2012; Walls et al., 2012; Arayssi et al., 2016; Keszey, 2020).
Additionally, hypothesis three was created to find out if female CEOs positively moderate the relationship between the sustainable marketing strategies and firm performance. Two significant moderation relationships were found. The first significant moderation was found on the relationship between ‘Environmental Products’ and ‘Tobin’s Q’. The second was found on the relationship between ‘Product Environmental Responsible Use’ and ‘Tobin’s Q’.
Both moderations showed a negative relationship. However, this effect was more negative with a female CEO than with a male CEO. Hence, in this case, a male CEO is less negative for these relationships than a female CEO. This is contradicted to what is stated in hypothesis three and the assumptions made based on previous research. A reason for this could be that there are not enough female CEOs compared to male CEOs (present sample had around 10% female CEOs) to test the actual effects they have.
Another reason could be that if the female CEO does focus more on sustainable performance and her focus is less on firm performance, firm performance could be negatively influenced in the end. However more research on this is needed, as the percentage of female CEOs is small in present sample.
41 crisis. In which they are put on a glass cliff and are more exposed to failure and criticism than males who are appointed under better circumstances. This could be the case for this sample as well. It could be that females are appointed in times of crisis or threat. Which would explain why they have worse effects on the relationship between sustainable marketing strategies and firm performance than male CEOs. For the reason that their top priority is not on long-term strategies such as implementing more sustainable marketing, but on the crisis or threat the firm is currently dealing with.
5.1 Country comparison
When looking at the Swedish companies it is interesting to see that when only the effects of sustainable marketing strategies on firm performance are tested, no significant effects are found. However, when including the percentage of females in the board, environmental products has a negative significant effect on Tobin’s Q. Which is interesting because Sweden was included in this study because it scored first place on the gender equality index (EIGE, 2019). Also, this provides evidence for the previously found results that females in boards lead to more sustainable marketing (e.g., Hunter et al., 2004; Zahran et al., 2006).
On the other hand, when looking at the United Kingdom companies the results illustrate that a negative significant effect is found for sustainable marketing strategies on firm performance. This is also interesting because the United Kingdom was chosen for its higher (than Sweden) score on the environmental performance index (EPI, 2020). At least this confirms that the reasons why these countries were chosen for this research are legit.
However, as only a small number of Swedish companies were eventually added in the sample, more research should be done on this topic to find out if female directors in Swedish companies actually advocate for more sustainable marketing strategies. Nonetheless, it is still good that a significant effect was found for at least 33 companies in Sweden. Furthermore, a reason why the sustainable marketing strategies alone are not significant in this sample could be that the firms in Sweden who did implement them did not have a gender-diverse board, which got them excluded from the present sample.
42 might not result in positive outcomes in the short-term (Silverman, 2003; Matsa and Miller, 2013).
Furthermore, a significant moderation was found of ‘percentages of females in boards’ on the relationship between ‘Environmental Products’ and ‘Tobin’s Q’. The moderation is slightly more positive with higher percentages of females than with lower percentages of females. However, it should be noted that in this split sample the threshold for this change in the moderation relationship is 40% and that the highest percentage of females in boards in this sample is 57.14% (Appendix C, Table 1). Therefore, this result does not mean that there should be advocated for high percentages of females in boards such as 70/80%. It does provide some evidence that there should be advocated for more equally divided boards. However, as this sample is very small more research should be done on this topic.
Moreover, a negative significant effect of ‘Environmental products’ on the ‘Tobin’s Q’ was found in the United Kingdom sample. This research was based on the assumption that sustainable marketing strategies have a positive effect on firm performance. However, in this case, the opposite is found. An explanation for this contradiction could be that in the beginning environmental products are costly. Because an investment in new material, machines and other fixed costs have to be made. It could be that all the companies in the United Kingdom sample have only recently added a sustainable product line. When this is the case the product might have a negative effect on the overall firm performance in the short run, because it first has to earn back the initial investment (Ülkü and Hsuan, 2017).
