Board Gender Diversity and Sustainable Performance in MENAT Region: Threshold Effect of Bank Market Power

Enhancing banks' environmental, social, and governance (ESG) performance is essential for high‐quality sustainable development in the Middle East, North Africa and Turkey (MENAT) region. Gender diversity, which is one of the main governance mechanisms, plays a crucial role and has a significant influence on the bank's ESG performance. This paper aims to understand the nonlinear relationship between board gender diversity and environmental, social and governance (ESG) performance. More precisely, we explore the threshold effect of bank market power on this relationship. To do so, we use a sample of 77 listed banks operating in nine MENAT countries (Egypt, Jordan, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, Turkey, UAE) over the period 2017–2024. To explore this model, this paper employs the Dynamic Panel Threshold Regression (DPTR) approach. This method accounts for the dynamic nature of the dependent variable and potential endogeneity. The findings indicate that there is a threshold effect of bank market power on board gender diversity‐ESG performance. The threshold value is estimated at 0.2553 (25.53%), beyond which (in a less competitive market) gender diversity begins to hinder ESG performance. This research contributes to the bank gender diversity and ESG literature by highlighting the role of bank market power, offering novel perceptions into mechanisms for enhancing bank sustainability.