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Board Gender Diversity and the Cost of Equity: What difference does gender quota legislation make?

Author

Listed:
  • Aitzaz Ahsan Alias Sarang

    (Iqra University)

  • Nicolas Aubert

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)

  • Xavier Hollandts

    (Kedge BS - Kedge Business School)

Abstract

This study examines the relationship between women directors and the cost of equity (COE). Investigating the French firm's sample, we find a significant negative effect of women directors on the cost of equity. Our results also document that the effect of women directors on reducing the cost of equity is significant for firms that have a critical mass of at least four women directors. Using the difference-in-difference (DID) and propensity score matching (PSM) approach, we find that the relationship between female directors and lower equity costs is significant for the period following the Copé–Zimmermann gender quota law. The results show that women directors' presence on corporate boards is also supported by economic reasons. The study provides implications in relation to the Copé–Zimmermann law in France.

Suggested Citation

  • Aitzaz Ahsan Alias Sarang & Nicolas Aubert & Xavier Hollandts, 2025. "Board Gender Diversity and the Cost of Equity: What difference does gender quota legislation make?," Post-Print hal-03875465, HAL.
    • Handle: RePEc:hal:journl:hal-03875465
    DOI: 10.1002/ijfe.2774
    Note: View the original document on HAL open archive server: https://hal.science/hal-03875465
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    Keywords

    Cost of Equity; Gender Quota Laws; Critical Mass; Women on Corporate Boards;
    All these keywords.

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