Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/231413 
Year of Publication: 
2021
Series/Report no.: 
ZEW Discussion Papers No. 21-023
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Using data across European corporate boards, we investigate the effects of quota-induced female representation on firm value and operations, under minimal identification assumptions. We consider sharp increases in the share of women on boards that arise due to rounding whenever percentage-based regulation applies to a small group of people. We find that having more women on corporate boards has large positive effects on Tobin's Q and buy-and-hold returns. This result is in stark contrast with previous empirical work that finds large negative effects. The reason for this discrepancy is that these papers considered firms with different pre-quota shares of women to be good counterfactuals to each other. In our data, we see that such firms had grown differently already before the regulation. Thus, assuming they are good comparables would result in a negatively biased estimate of the effect. Instead, we use quasi-random assignment induced by rounding and find that promoting gender equality is aligned with shareholder interests. This positive effect is not explained by increased risk-taking or changes in board composition, but rather by scaling down inefficient operations and empire-"demolishing".
Subjects: 
Gender diversity
women on boards
gender quota
performance
JEL: 
J16
G34
G38
D22
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.