A Female Style in Corporate Leadership? Evidence from Quotas

Abstract

This paper studies the impact of gender quotas for corporate board seats on corporate decisions. We examine the introduction of Norway’s 2006 quota, comparing affected firms to other Nordic companies, public and private, that were unaffected by the rule. We find that affected firms undertook fewer workforce reductions than comparison firms, increasing relative labor costs and employment levels and reducing short-term profits. The effects are strongest among firms without female board members beforehand and are present even for boards with older and more experienced members afterward. The boards appear to be affecting corporate strategy in part by selecting likeminded executives.

JEL Classification: G34, G38, M51, J78, J16