Abstract
Prior literature investigating board gender diversity consistently yields ambiguous results. Our study focuses on the specific German setting with a dualistic board structure and analyzes the causal effects of board gender diversity on firm performance by controlling for endogeneity issues. We examine 96 German publicly listed companies over the period from 2012 to 2022 applying two approaches: First, we evaluate if board women’s ratios impact firm performance, using ROA and Tobin’s Q as performance measures. We apply instrumental variable regressions and observe no significant results. Our second analysis, in contrast, does show significant causal effects as we investigate the impact of the recent German quota laws, FüPoG I and FüPoG II, on firm performance. Difference-in-difference analysis is applicable here, since not all German publicly listed companies are subject to the new legislation. The results show a significant negative effect of mandated quotas in the supervisory board on ROA and a respective positive effect in the management board on Tobin’s Q. We present several explanations for the inconclusive findings and provide inspirations for future research. Overall, our study shows that women’s ratios on boards do not harm or boost firm performance in Germany. Yet, the newly introduced gender quota can either lead to negative accounting performance or strengthen firms’ market performance depending on the type of board and its respective responsibilities.
Presenters
Sesile ÖzbekStudent, Master of Science, Reutlingen University, Baden-Württemberg, Germany Jan Hendrik Meier
Professor, Institute of Accounting and Auditing, Kiel University of Applied Sciences, Germany Carmen Finckh
Professor, ESB Business School, Reutlingen University , Baden-Württemberg, Germany
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
KEYWORDS
Board, Gender, Diversity, Quota, Firm Performance
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