Board Gender Diversity and the Cost of Equity: What difference does gender quota legislation make?

Aitzaz Ahsan Alias Sarang, Nicolas Aubert () and Xavier Hollandts ()
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Aitzaz Ahsan Alias Sarang: Iqra University
Xavier Hollandts: Kedge BS - Kedge Business School

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Abstract: This study examines the relationship between women directors and the cost of equity (COE). Investigating the French firm's sample, we find a significant negative effect of women directors on the cost of equity. Our results also document that the effect of women directors on reducing the cost of equity is significant for firms that have a critical mass of at least four women directors. Using the difference-in-difference (DID) and propensity score matching (PSM) approach, we find that the relationship between female directors and lower equity costs is significant for the period following the Copé–Zimmermann gender quota law. The results show that women directors' presence on corporate boards is also supported by economic reasons. The study provides implications in relation to the Copé–Zimmermann law in France.

Keywords: Cost of Equity; Gender Quota Laws; Critical Mass; Women on Corporate Boards (search for similar items in EconPapers)
Date: 2023-01-18
New Economics Papers: this item is included in nep-cfn, nep-gen and nep-law
Note: View the original document on HAL open archive server: https://hal.science/hal-03875465v1
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Published in International Journal of Finance and Economics, 2023, ⟨10.1002/ijfe.2774⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03875465

DOI: 10.1002/ijfe.2774

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