Corporate Gender Quotas Under the Lens : Evidence from California Senate Bill No. 826

This paper analyzes the effect of California’s gender quotas on corporate strategy and the representation of women in managerial positions. We find that affected firms adopt a long-term orientation by increasing their expenditures on research and development, organizational capital, and intangible assets and improving their corporate environmental performance and culture. The expenditures are financed through firms’ internal resources and do not lead to an overall increase in corporate indebtedness. In addition to the law’s direct effect on the presence of women on boards of directors, we provide evidence that it has also increased the presence of women in other managerial positions within affected corporations and has had spillover effects on other states through firms’ internal networks of establishments. Our results emphasize several social and economic benefits resulting from implementing this law previously ignored in the literature