Shareholder Wealth Effects of Policies Promoting Women on Boards: Evidence from Germany
58 Pages Posted: 26 Jul 2017 Last revised: 30 Oct 2017
Date Written: October 1, 2017
The implementation of a politically enforced gender quota promoting women on boards has been a major topic in the public debate in Germany during the last years. The present paper outlines a typology of different policies promoting women on boards and develops hypotheses about their effects on shareholder value. Furthermore, announcements of the proposals discussed in Germany are classified according to the typology and their impact is analyzed using an event study approach. While most of the announcements do not influence the stock returns significantly, one key event produces negative significant abnormal stock returns of approximately two percentage points: the resolution of the CDU/CSU to support the implementation of a mandated gender quota for publicly quoted and fully codetermined companies. A further regression analysis of the cumulative abnormal returns emphasizes that firms, which are subject to the upcoming mandated quota, exhibited more pronounced significant negative cumulative abnormal returns around the event days. The findings indicate that the implementation of a mandated quota harmed shareholder value.
Keywords: gender quota, shareholder wealth, corporate governance, women on boards
JEL Classification: G34, G38, J20, J48
Suggested Citation: Suggested Citation