The Norwegian Quota Law - A Success? Empirical Evidence on the Mid-term Effects of the Norwegian Quota Law

Mari Epland

Student thesis: Master thesis


Norway became revolutionary when they implemented their gender quota law on corporate boards in 2005. They set an example which several other countries wanted to follow, and in the following years similar gender quota laws appeared all over Europe. The law was obviously successful at achieving gender balance on the boards of publicly listed companies, but studies on the short-term economic impact of the law failed to see the same success. This thesis intends to examine the possible mid-term effects of quota law¶s impact on firm performance and the characteristics of directors and top management. The existing organizational theory indicates that companies could benefit from increased board diversity and the extra knowledge, skills and perspectives it brings. Evidence from previous studies on gender diversity has been non-conclusive on this matter, with some results finding a positive relationship, while some studies find a negative effect from an increase of female directors. The negative results are often suggested to be a result of excessive monitoring of well-governed firms or extra costs from interaction difficulties. This thesis investigates the mid-term effects of the gender quota law by looking at the effect of gender diversity on the firm performance of 108 listed Norwegian companies in the period 2009 to 2019. It also examines whether the effect of female directors changes based on how well a firm is performing using quantile regressions. Lastly, the paper explores the possible mid-term effects on the characteristics of both female and male directors, as well as the number of women in top management positions. The results from the empirical analysis suggest that female directors do not have a significant effect on the firm¶s performance, but the effect could differ based off how well a firm is performing. The quantile regressions show that female directors have a significant positive effect for firms with performance in the lower quantiles, as well as for well-performing firms. There are also differences in the female directors at the beginning of the period compared to the end of the period. The female directors are found to be older and with more board experience at the end of the period, closing the gap between the differences between female and male directors. There are also indications that women are more likely to achieve top management positions at the end of the period. The results of these mid-term effects could indicate that the effects of the quota law might change as time goes by.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
Publication date2021
Number of pages84
SupervisorsPhilip Rosenbaum