The impact of board gender quotas on analyst recommendations: A difference-in-differences analysis

Norway provides the case study for examining the impact of board gender quotas on firm performance. The debate that ultimately led to the introduction of the quota was heated and polarised, with opponents of the quota arguing that the inability of the firm's owners to select the best candidates for the board (regardless of gender) would result in poorly managed firms. Although several articles have empirically examined the impact of the Norwegian gender quota on performance, the available evidence is inconclusive. These articles use return on assets and/or Tobin's Q as indicators of performance. The present study contributes to the literature by providing a new and complementary approach to this research topic. To this end, we examine the impact of board gender quotas on analysts' perceptions of performance, as measured by investment recommendations. The research design adopts a difference-in-differences methodology coupled with fixed effects panel data estimation. The results document that recommendations on Norwegian stocks did not change significantly after the introduction of the quota. This result is robust to a variety of sensitivity analyses and controls.