Women Directors and R&D Investment in Family Firms: The Mediating Role of Debt Financing

Although research examining the role of women directors in fostering innovation within family firms continues to expand, the mechanisms underlying their influence remain insufficiently understood. This study examines the mediating role of debt financing in the relationship between women directors and R&D investment. Drawing on upper echelons theory and the socioemotional wealth perspective, we theorize that women directors' heightened risk aversion and long-term orientation lead family firms to adopt more conservative debt policies, thereby reducing financial constraints that typically discourage innovation. Using a longitudinal dataset of Italian listed family firms, we find that a greater proportion of women directors on the board is associated with lower levels of indebtedness, which in turn fosters increased investment in R&D. By identifying debt financing as a critical mechanism linking board composition to innovation strategy, this study advances theoretical understanding of how women directors influence innovation within family firms.