Towards Equal Participation in Leadership - An empirical study on the short-term effects of a mandatory gender quota on supervisory boards in Germany

Abstract: With growing pressure for policy makers to address the underrepresentation of women in corporate leadership roles, it is important to analyze the effectiveness of board quotas as a demand-side intervention. This thesis examines the short-term effects of a mandatory gender quota on supervisory boards implemented in Germany in January 2016. We compile a dataset containing data on board composition and firm financial performance for the years 2010 - 2017, using two panel databases and a cross-sectional dataset. We identify the effects of the quota on subsequent female board share, and on firm financial performance, using a difference-in-differences framework. We find that the quota effectively increased the share of women on supervisory boards in the first two years following its introduction. We also find evidence that affected firms pre-emptively increase their female representation on supervisory boards beginning in 2014. Contrary to popular critiques of board gender quotas, we find that the quota has no significant impact on experience of board members and on firm performance. Furthermore, we find no evidence of spillover effects to the share of women on executive boards.