Firm Performance and Boardroom Gender Diversity: A Quantile Regression Approach

Abstract

We investigate the relation between firm performance and boardroom gender diversity using quantile regression methods. We explicitly test for heterogeneity in the performance impact of women on boards. Using data on over 2000 US firms in 2013 we show that board gender diversity has a positive effect on the conditional mean of firm performance measured by Tobin's Q. Critically, we demonstrate that the presence of women directors alters the dispersion of Tobin's Q. The quantile regressions show that female directors have a significantly larger positive impact in high-performing firms relative to low-performing firms. The board gender diversity effect is not homogeneous as assumed in previous research. This might help explain the mixed empirical findings in extant studies. Overall, our results suggest that boardroom gender diversity has an effect on both the conditional mean and the dispersion of firm performance.