Gender diversity in corporate boards: Evidence from quota-implied discontinuities

Olga Kuzmina and Valentina Melentyeva ()
Additional contact information
Valentina Melentyeva: ZEW and University of Mannheim

No w0282, Working Papers from New Economic School (NES)

Abstract: Using data across European corporate boards, we investigate the effects of quota-induced female representation on firm value and operations. We use quasi-random assignment induced by rounding and find that promoting gender equality is aligned with shareholder interests. This result is in stark contrast with previous work finding large negative effects of women on firm value. This discrepancy arises because these papers considered firms with different pre-quota shares of women to be good counterfactuals to each other. In our data, we see that such firms grew differently already before the regulation, resulting in a negatively biased estimate of the effect. We overcome this bias by considering sharp increases that arise whenever percentage-based regulation applies to a small group of people. We further show that these large positive effects of female directors are not explained by increased risk-taking or changes in board characteristics, but rather by scaling down inefficient operations and empire-"demolishing".

Keywords: Gender diversity; gender quota; board of directors; firm performance (search for similar items in EconPapers)
JEL-codes: C18 G34 G38 J16 J48 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2021-02
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-gen, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.nes.ru/files/Preprints-resh/WP282.pdf (application/pdf)

Related works:
Working Paper: Gender diversity in corporate boards: Evidence from quota-implied discontinuities (2021)
Working Paper: Gender diversity in corporate boards: Evidence from quota-implied discontinuities (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:abo:neswpt:w0282

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