Gender Diversity in Corporate Boards and Firm Performance: the Role of Cultural Norms and Institutions

This paper addresses the problem of change in business effectiveness due to recently implemented gender quotas that oblige companies to provide certain percentages of female representation on corporate boards. We suppose that the effect from such state regulations is not the same for firms in different countries due to cross-countries’ gender disparities and opportunities for building a career for women. In our research, we study the impact of quotas on companies’ financial performance taking into account institutional factors and social norms varied across countries. We found a positive and statistically significant effect from gender quotas on firms’ business results after comparing companies with obligatory quotas to those that are free from such regulation. Moreover, this positive effect from introduced quotas is less for firms that located in countries where gender parity exists. As governments increasingly inspire board gender diversity regulations, our study stresses that state intervention in the corporate structure not necessarily leads to positive impact on business performance in countries with gender parity in society.