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Olga Kuzmina, Ph.D.

New Economic School, Russia

Authors: Olga Kuzmina, Valentina Melentyeva

Abstract: We investigate the effects of women directors on firm value and operations, using data across 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 promoting gender equality is aligned with shareholder interests.

JEL Classification: J16, J48, G34, G38, C18
Keywords: Gender diversity, gender quota, board of directors, firm performance

Full Text: Gender Diversity in Corporate Boards: Evidence from Quota-implied Discontinuities

Come and listen to the opening lecture of the Week at Czech Academy of Sciences titled "The End of Welfare", featuring economist Filip Pertold (CERGE-EI), David Klimes (Charles University) and Tomáš Kostelecký (Academy of Sciences ), on 31 October at 6:30 pm in Přítomnost Cinema.

The global economy is going through a tough test. How’s Czech coping with the crisis? Who’s most affected by rising energy and food prices? And how to protect the most vulnerable? Will we have to radically change our habits and will prosperity come to an end?

More on the Week of the Academy of Sciences of the Czech Republic.