Moderating effect of board gender diversity on the relationship between prospector business strategy and financial performance: evidence from Indonesia

This study explores the relationship between prospector business strategy and financial performance. It also proposes gender diversity in boards as a moderating variable in the relationship between prospector business strategy and financial performance. A sample of all Indonesian manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021 is used, with a total sample size of 970 observations. In testing the hypothesis, this study employs Ordinary Least Squares (OLS) regression models, robustness tests, and additional analysis to strengthen the research results. Results showed a positive correlation between the prospector business strategy and the company financial performance, and such a positive relationship is weakened by the board gender diversity. Meanwhile, the results of robustness tests using the coarsened exact method and Heckman’s two-stage model are consistent with the main results. Additional analysis reveals that prospector business strategy affects financial performance and interestingly, board gender diversity also weakens the relationship between prospector business strategies and financial performance. This relationship for firms at both high and low efficiency levels. This study provides stakeholders and executives fresh insights on strategy selection based on board gender composition to enhance decision-making and boost financial performance.