Do Women Directors Improve Firm Performance? Evidence From India


May 2023


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Prior studies have documented, in various countries, negative effects of gender quota laws on firm value, suggesting that such quotas are detrimental for firm outcomes. In this paper, I revisit this question using gender quota laws in India. The Companies Act, 2013 required all listed firms and public firms that exceed a size threshold to mandatorily appoint at least one woman director on the board. The rule was first applicable for fiscal year 2015. In contrast to prior studies, I document a positive effect of quota legislation in India. I find that the cross-section of the firms that appointed non-promoter women directors or did not belong to a business group, have a significant improvement in operating performance, relative to the control group. Additional cross-sectional analyses show that firms that have relatively lower bias against women or face lower supply constraints, experience a significant positive effect from the quota legislation. Overall, my results suggest that the quota legislation in India had positive effects on firm performance.



Business Administration, Accounting