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How do firms respond to gender quotas? Evidence from California's Senate Bill 826

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  • Gopal, Bhargav

Abstract

This study examines the impact of California's SB826, enacted in 2018 and requiring at least one female director on corporate boards by 2019, on financial performance and governance. The quota reduced the share of all-male boards by 24 percentage points without harming financial performance from 2018 to 2021. Governance measures remained stable. Firms responded with both tokenism and meaningful integration, with tokenism more common in larger boards and those in male-dominated industries. I find that SB826 reduced firms' reliance on existing networks, suggesting that network barriers may have previously prevented some qualified women from joining boards.

Suggested Citation

  • Gopal, Bhargav, 2025. "How do firms respond to gender quotas? Evidence from California's Senate Bill 826," CLEF Working Paper Series 90, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    • Handle: RePEc:zbw:clefwp:327120
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    1. Stephen P. Ferris & Murali Jagannathan & A. C. Pritchard, 2003. "Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments," Journal of Finance, American Finance Association, vol. 58(3), pages 1087-1111, June.
    2. Seierstad, Cathrine & Opsahl, Tore, 2011. "For the few not the many? The effects of affirmative action on presence, prominence, and social capital of women directors in Norway," Scandinavian Journal of Management, Elsevier, vol. 27(1), pages 44-54, March.
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    4. repec:bla:jfinan:v:58:y:2003:i:3:p:1087-1112 is not listed on IDEAS
    5. 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.
    6. Abigail Allen & Aida Sijamic Wahid, 2024. "Regulating Gender Diversity: Evidence from California Senate Bill 826," Management Science, INFORMS, vol. 70(4), pages 2023-2046, April.
    7. Greene, Daniel & Intintoli, Vincent J. & Kahle, Kathleen M., 2020. "Do board gender quotas affect firm value? Evidence from California Senate Bill No. 826," Journal of Corporate Finance, Elsevier, vol. 60(C).
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