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The valuation impact of gender quotas in the boardroom: Evidence from the European markets

Lookup NU author(s): Dr Shams PathanORCiD

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).

Abstract

© 2023 The Author(s)We investigate stock market reactions to the announcement of the new, June 2022 European Union (EU) regulation on board gender diversity, which requires firms to appoint a minimum of 33% female directors (or 40% female non-executive directors). We find that the abnormal market returns surrounding the EU announcement are positive. We also note that the observed positive valuation effects are particularly strong for: (1) firms in countries with softer existing regulations on board gender diversity; and (2) firms with a larger gap between current levels of board gender diversity and the 33% gender quota. Our analysis of the EU legislation on gender quotas offers solid evidence that board gender quotas are perceived by investors as beneficial, particularly for firms exposed to a large gender imbalance.

Publication metadata

Author(s): Fernandez-Mendez C, Pathan S

Publication type: Article

Publication status: Published

Journal: Finance Research Letters

Year: 2023

Volume: 54

Print publication date: 01/06/2023

Online publication date: 13/02/2023

Acceptance date: 11/02/2023

Date deposited: 19/12/2023

ISSN (print): 1544-6123

ISSN (electronic): 1544-6131

Publisher: Elsevier Ltd

URL: https://doi.org/10.1016/j.frl.2023.103699

DOI: 10.1016/j.frl.2023.103699

Data Access Statement: Data will be made available on request.

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