A Female Style in Corporate Leadership? Evidence from Quotas

TLDR

The study examines how gender quotas for corporate board seats affect corporate decisions. The authors analyze Norway's 2006 board quota by comparing firms subject to the rule with unaffected Nordic firms, both public and private. Firms subject to the quota cut fewer workforce reductions, raising labor costs and employment while lowering short‑term profits, with the strongest effects in firms that had no female board members before and persisting even after boards become older and more experienced, suggesting boards shape strategy by hiring like‑minded executives. JEL codes: G34, J16, J78, M12, M51.

Abstract

This paper studies the impact of gender quotas for corporate board seats on corporate decisions. We examine the introduction of Norway's 2006 quota, comparing affected firms to other Nordic companies, public and private, that are unaffected by the rule. We find that affected firms undertake fewer workforce reductions than comparison firms, increasing relative labor costs and employment levels and reducing short-term profits. The effects are strongest among firms without female board members beforehand and are present even for boards with older and more experienced members afterward. The boards appear to be affecting corporate strategy in part by selecting like-minded executives. (JEL G34, J16, J78, M12, M51)