Board Gender-Balancing and Firm Value
62 Pages Posted: 14 Mar 2016 Last revised: 14 Nov 2019
Date Written: November 8, 2019
Prior studies of Norway's 2003 pioneering board gender-quota law conclude that it imposed statistically and economically large costs on shareholders of firms listed on Oslo Stock Exchange. We show that this dramatic conclusion does not survive simple but necessary econometric adjustments, whether applied to prior data sets or our larger data panel. Notwithstanding substantial statistical power, our estimates fail to reject the hypothesis of a zero impact of the quota on equity values (announcement returns, long-run portfolio returns, Tobin's Q) and long-run operating profitability. Also important, we document that boards' CEO experience from large firms - the most important type of director CEO experience - did not decline. Finally, there is little evidence that the quota itself caused legal conversion. Overall, our new evidence suggests that the pool of qualified female directors was sufficiently deep to avoid significant shareholder-borne costs of the quota.
Keywords: Gender quota, director independence, valuation effect, long-run performance, corporate conversion, busy directors, director network power
JEL Classification: G38
Suggested Citation: Suggested Citation