Board gender diversity and firm performance

A publication titled “Board gender diversity and firm performance revisited: international evidence” on Applied Economics by George Wu and co-authors in April 2025

Abstract

We examine the relationship between board gender diversity and firm performance across 40 countries in the period 2009–2018. Using an instrumental variable approach, we show that the presence of female directors negatively affects firm performance. We further explore how country- and firm-level institutions reshape this negative relationship. We find that the negative effect of female directors on firm performance is alleviated in countries with a higher score for control of corruption, government effectiveness, rule of law and regulatory quality. At the firm-level, the negative relationship between board gender diversity and firm performance is mitigated in firms with more anti-takeover devices and a board gender diversity policy, but is strengthened when the CEO also holds the title of the chair of the board. Overall, we agree with previous literature that proposals for regulations enforcing gender quotas on boards must be motivated by reasons other than improvements in firm performance.