Board gender diversity and the cost of equity: What difference does gender quota legislation make?

This study examines the relationship between women directors and the cost of equity (COE). Investigating the French firm's sample, we find a significant negative effect of women directors on the COE. Our results also document that the effect of women directors on reducing the COE is significant for firms that have a critical mass of at least four women directors. Using the difference-in-difference (DID) and propensity score matching (PSM) approach, we find that the relationship between female directors and lower equity costs is significant for the period following the Cope-Zimmermann gender quota law. The results show that women directors' presence on corporate boards is also supported by economic reasons. The study provides implications in relation to the Cope-Zimmermann law in France.