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Gender Quotas in the Boardroom: New Evidence from Germany

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Listed:
  • Alexandra Fedorets
  • Anna Gibert
  • Norma Burow

Abstract

We examine the introduction of a gender quota law in Germany, mandating a minimum 30% of the underrepresented gender on the supervisory boards of a particular type of firms. We exploit the fact that Germany has a two-tier corporate system consisting of the affected supervisory boards and unaffected management boards within the same firm. We find a positive effect on the female share on supervisory boards of affected firms, but no effect on presidency of the board or its size. We also study whether the increased female representation has had an effect on the financial performance of the firm and conclude that, unlike some previous studies in other countries, there has not been any negative effect on the profitability of the firm, neither at the time when the law was announced nor when it was passed.

Suggested Citation

  • Alexandra Fedorets & Anna Gibert & Norma Burow, 2019. "Gender Quotas in the Boardroom: New Evidence from Germany," Discussion Papers of DIW Berlin 1810, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1810
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.669197.de/dp1810.pdf
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    References listed on IDEAS

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    1. Lori Beaman & Raghabendra Chattopadhyay & Esther Duflo & Rohini Pande & Petia Topalova, 2009. "Powerful Women: Does Exposure Reduce Bias?," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1497-1540.
    2. Giulia Ferrari & Valeria Ferraro & Paola Profeta & Chiara Pronzato, 2022. "Do Board Gender Quotas Matter? Selection, Performance, and Stock Market Effects," Management Science, INFORMS, vol. 68(8), pages 5618-5643, August.
    3. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    4. Kenneth R. Ahern & Amy K. Dittmar, 2012. "The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 137-197.
    5. Nina Smith, 2018. "Gender quotas on boards of directors," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-10, December.
    6. Norma Burow & Alexandra Fedorets & Anna Gibert, 2018. "Frauenanteil in Aufsichtsräten steigt, weitere Instrumente für die Gleichstellung gefragt," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 85(9), pages 149-155.
    7. Agata Maida & Andrea Weber, 2022. "Female Leadership and Gender Gap within Firms: Evidence from an Italian Board Reform," ILR Review, Cornell University, ILR School, vol. 75(2), pages 488-515, March.
    8. Pathan, Shams & Faff, Robert, 2013. "Does board structure in banks really affect their performance?," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1573-1589.
    9. Tyrefors, Björn & Jansson, Joakim, 2017. "Gender Quotas in the Board Room and Firm Performance: Evidence from a Credible Threat in Sweden," Working Paper Series 1165, Research Institute of Industrial Economics.
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    Cited by:

    1. Valeria Gattai & Piergiovanna Natale & Francesca Rossi, 2022. "Board Diversity and Outward FDI: Evidence from Europe," Working Papers 491, University of Milano-Bicocca, Department of Economics, revised Mar 2022.
    2. Koray Aktaş & Valeria Gattai & Piergiovanna Natale, 2023. "Board gender quotas and outward foreign direct investment: Evidence from France," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1291-1321, November.
    3. Gattai, Valeria & Natale, Piergiovanna & Rossi, Francesca, 2023. "Board diversity and outward FDI: Evidence from europe," Economic Modelling, Elsevier, vol. 120(C).
    4. Koray Aktas & Valeria Gattai & Piergiovanna Natale, 2021. "Board Gender Quotas and Outward Foreign Direct Investment: Evidence from France," Working Papers 485, University of Milano-Bicocca, Department of Economics, revised Dec 2021.

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    More about this item

    Keywords

    Gender quota; Economics of gender; Labor discrimination; Personnel economics; Firm performance;
    All these keywords.

    JEL classification:

    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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