As California goes, so goes the nation? Board gender quotas and the legislation of non-economic values
Felix von Meyerinck (),
Markus Schmid and
Steven Davidoff Solomon
No 1904, Working Papers on Finance from University of St. Gallen, School of Finance
In 2018, California became the first U.S. state to introduce a mandatory board gender quota for all firms headquartered in the state. We document negative announcement returns to the adoption of the quota for Californian firms, but also large negative spillover effects on a matched group of non-Californian firms, particularly those located in states that followed California’s legislative lead in the past by raising minimum wages or legalizing cannabis. Frictions on the director labor market only explain a small fraction of value losses of Californian firms. They do not explain the negative spillover effects on firms in other states. We propose shareholders’ fear of further legislation of non-economic values as a new explanation for the negative announcement returns to gender quotas. In line with this view, we find that firms with higher policy sensitivity show the strongest reaction.
Keywords: Board Gender Quota; Firm Value; Director Labor Market (search for similar items in EconPapers)
JEL-codes: J16 J78 K38 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2019-02, Revised 2019-12
New Economics Papers: this item is included in nep-gen
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2019:04
Access Statistics for this paper
More papers in Working Papers on Finance from University of St. Gallen, School of Finance Contact information at EDIRC.
Bibliographic data for series maintained by ().