What question did this study set out to answer?

To assess the causal impact of mandated female board representation on corporate performance and risk while addressing endogeneity and bias in existing literature.

June 16, 2019The Leadership QuarterlyOpen Access

Women directors, firm performance, and firm risk: A causal perspective

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To assess the causal impact of mandated female board representation on corporate performance and risk while addressing endogeneity and bias in existing literature.
Applied a difference-in-differences econometric framework testing the common trend assumption across publicly traded firms.
Compared Norwegian firms subject to mandatory gender quota legislation against control firms from Finland, Sweden, and Denmark.
Evaluated performance using both accounting-based metrics (operating income over assets, return on assets) and market-based metrics (market-to-book ratio, Tobin's Q), alongside measures of firm risk.
Mandated board gender quotas resulted in a significant qualitative decrease in corporate financial performance across both accounting-based and market-based indicators.
Mandatory representation of women directors caused a qualitative reduction in firm risk levels.

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Implication

Difference-in-differences analysis reveals reduced performance and risk in publicly traded firms, indicating significant economic trade-offs from board quotas.

Cite This Study

Yang et al. (2019) studied this question.

synapsesocial.com/papers/6a196ce9f3c200df10585ac8 https://doi.org/10.1016/j.leaqua.2019.05.004

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Implication

Difference-in-differences analysis reveals reduced performance and risk in publicly traded firms, indicating significant economic trade-offs from board quotas.

Women directors, firm performance, and firm risk: A causal perspective

Key Points

Discussion

Implication

Cite This Study

Women directors, firm performance, and firm risk: A causal perspective

Key Points

Discussion

Implication

Cite This Study

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