Gender Diversity in Corporate Boards: Evidence from Quota-Implied Discontinuities

60 Pages Posted: 16 Aug 2021

See all articles by Olga Kuzmina

Olga Kuzmina

New Economic School (NES); Centre for Economic Policy Research (CEPR)

Valentina Melentyeva

ZEW – Leibniz Centre for European Economic Research; University of Mannheim

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Date Written: August 13, 2021

Abstract

We investigate the effects of women directors on firm value and operations, using data across seven European countries that introduced mandatory or voluntary regulation on female representation in corporate boards. We exploit quasi-random assignment induced by rounding, whenever percentage-based regulation applies to a small group. We find that having more women on board causally increases Tobin's Q and buy-and-hold returns. We further demonstrate that these positive effects are not explained by increased risk-taking or changes in board characteristics, but rather by reductions in empire-building activity. Our results highlight that gender quotas are not necessarily a costly way of promoting equality.

Keywords: Gender diversity, gender quota, board of directors, firm performance

JEL Classification: J16, J48, G34, G38, C18

Suggested Citation

Kuzmina, Olga and Melentyeva, Valentina, Gender Diversity in Corporate Boards: Evidence from Quota-Implied Discontinuities (August 13, 2021). Available at SSRN: https://ssrn.com/abstract=3904886 or http://dx.doi.org/10.2139/ssrn.3904886

Olga Kuzmina (Contact Author)

New Economic School (NES) ( email )

45 Skolkovskoe shosse
Moscow, Moscow 121353
Russia

HOME PAGE: http://pages.nes.ru/okuzmina/

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Valentina Melentyeva

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

University of Mannheim ( email )

Universitaetsbibliothek Mannheim
Zeitschriftenabteilung
Mannheim, 68131
Germany

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