Gender at the Helm: How Board Diversity Shapes the Payoff from Eco-Innovation in Working Capital Management

This study examines the relationship between eco-innovation (EI) and working capital efficiency (WCE), with board gender diversity (BGD) acting as a moderator. Based on the Resource-Based View, Stakeholder, Legitimacy, and Shareholder theories, the study examines how well sustainability-focused tactics improve businesses’ operational success. WCE is measured using the cash conversion cycle (CCC) and its components, including accounts payable period (APP), inventory conversion or holding period (ICP), and accounts receivable period (ACP). Based on the panel-data and strong regression models and firm-level controls, time, and industry effects, the results suggest that eco-innovation positively influences the working capital efficiency through the reduction of cash conversion cycles and the improvement of working processes. Gender diversity in the board moderates this relationship, meaning that diverse boards enhance governance and strategic alignment. The research adds to the literature by identifying a connection between sustainability practices and financial performance and the significance of incorporating eco-innovation and inclusive governance to obtain sustainable operational performance.