On March 6, 2015, Germany followed Norway’s lead and introduced a statutory gender quota
for supervisory boards, requiring publicly listed and parity co-determined companies to give at
least 30% of their board seats to women. In a sample of 72 German companies, we explore the effect of gender quotas on firm performance. Consistent with previous literature, we find evidence that the introduction of a quota law harms firm performance as measured by ROA.
However, the magnitude of this effect is smaller, ...
On March 6, 2015, Germany followed Norway’s lead and introduced a statutory gender quota
for supervisory boards, requiring publicly listed and parity co-determined companies to give at
least 30% of their board seats to women. In a sample of 72 German companies, we explore the effect of gender quotas on firm performance. Consistent with previous literature, we find evidence that the introduction of a quota law harms firm performance as measured by ROA.
However, the magnitude of this effect is smaller, while still negative, for firms with a higher
percentage of gender diversity on supervisory boards. Furthermore, we account for heterogeneity
in ownership, culture, and industry. The moderating effect of board gender diversity on the
negative law effect is stronger for non-family-owned firms, firms headquartered in a protestant
region, and non-manufacturing firms. Conversely, this moderating effect disappears with regard
to family-owned firms, firms located in a catholic region, and manufacturing firms. Our results
are robust controlling for firm-level time varying characteristics as well as firm fixed effects.
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