Valuation effects of Norway's board gender-quota law revisited

50 Pages Posted: 14 Mar 2016 Last revised: 6 Jan 2021

See all articles by B. Espen Eckbo

B. Espen Eckbo

Tuck School of Business at Dartmouth; European Corporate Governance Institute (ECGI)

Knut Nygaard

Oslo Business School at Oslo Metropolitan University

Karin S. Thorburn

Norwegian School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: December 25, 2020

Abstract

We highlight the complexities in estimating the valuation effects of board gender quotas by critically
revisiting studies of Norway’s pioneering board gender-quota law. We use Ahern and Dittmar (2012)’s short-run event study to illustrate (1) the difficulties in attributing quota-related news to specific dates, (2) the need to account for contemporaneous cross-correlation of stock returns when judging the statistical significance of event-related abnormal stock returns, and (3) the fundamental difficulty of separating quota-induced valuation effects from the influences of firm characteristics and macroeconomic events such as the financial crisis. We provide new evidence suggesting that the valuation effect of Norway’s quota law was statistically insignificant. Overall, our evidence suggests that, at the time of the Norwegian quota, the supply of qualified female director candidates was high enough to avoid the negative consequences of the quota highlighted previously in the literature.

Keywords: gender quota; board diversity; valuation effect; return correlation; long-run performance

JEL Classification: G14, G34

Suggested Citation

Eckbo, B. Espen and Nygaard, Knut and Thorburn, Karin S., Valuation effects of Norway's board gender-quota law revisited (December 25, 2020). Management Science, forthcoming, European Corporate Governance Institute (ECGI) - Finance Working Paper No. 463/2016, Available at SSRN: https://ssrn.com/abstract=2746786 or http://dx.doi.org/10.2139/ssrn.2746786

B. Espen Eckbo (Contact Author)

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States
603-646-3953 (Phone)
603-646-3805 (Fax)

HOME PAGE: http://tuck.dartmouth.edu/faculty/faculty-directory/b-espen-eckbo

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Knut Nygaard

Oslo Business School at Oslo Metropolitan University ( email )

Pilestredet 35
Oslo, 0167
Norway

Karin S. Thorburn

Norwegian School of Economics ( email )

Helleveien 30
N-5045 Bergen
Norway
+4755959283 (Phone)

HOME PAGE: http://www.nhh.no/cv/thorburn

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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