In late August, NES Professor Olga Kuzmina presented her research “Gender Diversity in Corporate Boards: Evidence From Quota-Implied Discontinuities” (joint with NES graduate Valentina Melentyeva (BAE’18), currently at the University of Mannheim) at the European Finance Association 2021 Annual Meeting and 3rd Endless Summer Conference Financial Intermediation and Corporate Finance.
Olga Kuzmina and her coauthor use data across corporate boards of 757 European companies to investigate the effects of quota-induced female representation on firm value and operations, under minimal identification assumptions. They find that having more women in corporate boards increases firm value and reduces inefficient operations. Companies with more women on their boards of directors receive higher long-term returns (by 1.6-3.8% annually). At the same time, the average age, qualifications and professional experience of board members remain at about the same level as before the introduction of quotas, and attendance at meetings significantly increases. They also find that the positive value effects are primarily explained by reductions in “empire-building” activity - a situation when the company spends money ineffectively on corporate expansion.
The annual meeting of the European Finance Association brings together professionals and financial economists involved in the high-level research, study, teaching, and practice of finance.
The Endless Summer Conference is organized by the Centre for Economic Policy Research (CEPR) and hosts international researchers in financial intermediation and corporate finance.