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

Author

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  • Aitzaz Ahsan Alias Sarang

    (IU - 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, 2023. "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-03875465v1
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    2. Alan Bandeira Pinheiro & Nágela Bianca do Prado & Gustavo Hermínio Salati Marcondes de Moraes & Flávio Hourneaux Junior, 2025. "Exploring the United Nations Global Compact adoption in a multi‐level perspective," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(2), pages 2352-2363, April.
    3. Wu, Xingying & Liu, Shan, 2025. "Gender diversity in top management and its impact on firm-level digital transformation: Evidence from China," Economic Modelling, Elsevier, vol. 145(C).
    4. Aitzaz Ahsan Alias Sarang & Asad Ali Rind & Riadh Manita & Asif Saeed, 2025. "Does a co‐opted director affect a firm's financial distress risk?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 1275-1301, April.

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