Board gender diversity revisited: Evidence from supply-side shocks in China

This paper studies the effect of board gender diversity on firm performance by exploiting unique historical supply-side shocks in China. Specifically, we find that the resumption of Gaokao along with the Great Chinese Famine jointly resulted in an evident gender gap in the supply of qualified directors in certain cohorts. Utilizing the different exposures to the shocks across regions or firms, we construct two novel instrumental variables for board gender diversity and identify a positive causal effect on firm performance. Moreover, we find that board gender diversity is beneficial to firm performance through better corporate governance and operational efficiency. Our results highlight that historical events can influence labor market structure and firm performance decades later.