The threat led to a significant and rapid increase in the proportion of female board members in companies listed on the Stockholm Stock Exchange. Interestingly, this increase was accompanied by an increase in the company's performance measures in exactly the same year. In the following years, gender quotas in the boardrooms were absent from the debate, as depicted in Figure 1.
As the annual meeting typically takes place in late spring, 2003 will be the first year of consideration. 6. However, the investigation into the law was established by Minister of Justice Thomas Bodström in the summer of 2005, and in June 2006 a bill was finished. In this paper, we suggest that it is implausible to assume that the exclusionary restriction would hold both by lawmaking and by the threat of a law.
Given the large amount of disagreement in the evaluations of the Norwegian reform, we provide a battery of specification tests in this paper. The sensitivity of the results to these constraints can also be found in the appendix. The definition of a parent company is one that controls other companies in the group (the subsidiaries).
Since the board of the parent company is in charge of the subsidiaries, this does not present any problem with respect to the measurement of the female director's share, which is simply the share on the parent board.
Main Results
Summary statistics for listed and non-listed firms after the winsorizing process are shown in Table 1. Interestingly, in the years before the quota threat, we can see a slightly upward and parallel trend in both listed and non-listed firms. listed. although non-listed firms have a higher proportion of female directors. After the threat, there is a remarkable increase for the listed firms, while the unlisted firms remain in the same rough trend.
Although estimates show small pre-threat effects, there may be weak evidence of an increase in share. Interestingly, listed parent companies have a negative ROA over the entire period, not just in the post-2000 crisis. However, calculating this metric requires the market value of the company, which is not possible for non-listed companies. to notice.
After the threat, profits increased by about 2-4 percent of assets among listed companies relative to the change in earnings among non-listed companies over the same time period. Then there is a large response for the listed group until both the women's share and the gains over the assets occur before stabilization occurs. Finally, to address concerns about reduced-form linear trends in the proportion of female directors and the concern that the effect may be due to Ashenfeter collapse, we perform a robustness check using a synthetic control group approach.
The effect sizes are 8 percentage points for the share of female directors and about 3 percentage points for profits.14 Thus, concerns about trends or declines are not critical to our results. The exact resulting estimates of the effect can be found in Table A1 in the Appendix. In summary, profits increased by about 2 – 5 percent of assets among listed firms after the threat relative to the change in profits in unlisted firms in the same period.
Since the operating result includes depreciation and amortization, we also show the effect for the result EBITDA/assets in column (2). Again, our estimate is a statistically significant EBITDA/assets increase of approximately 4 percent of assets among listed companies after the threat, relative to the change in profits in unlisted companies over the same time period. Interestingly, labor costs/assets decline by approximately 2 percent of assets among listed firms after the threat relative to the change in profits in unlisted firms over the same time period.
Conclusion
Referring to Table 5, Column (1), we confirm that the numerator of our most important outcome, operating profits/assets, is positively and significantly affected by the threat. Columns (2) and (3) show an increase in the number of uses, although the figures are somewhat functionally specific because the effect becomes insignificant when the logs are used instead of the planes. Columns (4)-(6) speak directly to our concern about the use of a gender quota law or a threat as a tool in relation to the validity of the exclusionary restriction.
This result is consistent with the fact that female CEOs are employed on corporate boards and are not replaced by women alone. A back of the envelope calculation suggests that boards expand for one woman due to the threat of quotas. Thus, this finding clearly shows how the threat of a gender quota affects a number of potential channels that influence firm performance.
22 operating profit/balance sheet total; on average, earnings among listed firms increased by about 2-4 percent of assets relative to the change in earnings among non-listed firms after the threat. However, the increased representation of women on boards of directors did not lead to more frequent hiring of women in CEO positions, neither in the short nor in the long term. In fact, our results show the opposite, suggesting that some female CEOs were employed on boards and were not always replaced by female CEOs.
Although we attempt to make substantial progress regarding the implementation of the method, we cannot rule out the possibility that, compared to the Norwegian studies, our conflicting results are due to differences between countries and reforms. Clearly, the effects of gender quotas on firm performance may be a non-linear function of women's representation. Standard errors Clustered by industry Clustered by industry Clustered by industry Clustered by industry Newey-West Clustered by industry Standard errors in brackets, *p< 0.10, **p< 0.05, ***p< 0.01.
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