Corporate Gender Quotas Under the Lens: Evidence from California Senate Bill No. 826
Summary This paper investigates the impact of California’s gender quota law on corporate strategy and the representation of women in managerial positions. Our findings suggest that affected firms adopt a long-term strategic orientation, demonstrated by increased investments in research and development, organizational capital, and intangible assets, as well as improvements in corporate environmental performance and […]
Mingying Cheng is an Assistant Professor of Finance at Rowan University. This post is based on a recent paper by Professor Cheng, Professor Iftekhar Hasan, Professor Kose John, and Professor Stefano Manfredonia.
Summary
This paper investigates the impact of California’s gender quota law on corporate strategy and the representation of women in managerial positions. Our findings suggest that affected firms adopt a long-term strategic orientation, demonstrated by increased investments in research and development, organizational capital, and intangible assets, as well as improvements in corporate environmental performance and culture. These investments are financed through internal resources, avoiding an increase in corporate indebtedness. Beyond the direct effect on board representation, the law also enhances female representation in other managerial positions and produces spillover effects, increasing female leadership in establishments across other states through firms’ internal networks. Our findings highlight both the social and economic benefits of this law, which have been underexplored in previous literature.
