How Gender Equality Mandatory and Non-mandatory regulations affect financial performance of firms

In an effort to achieve a perceived status of gender equality among both sexes, mandatory and nonmandatory gender quotas are implemented at an increasing rate. Such quotas often create negative effects for all the parties involved, rather than achieving their supposed desired result. One adverse effect is that it creates a notion of hiring just to fill the quota. Nevertheless, individuals should be assessed separately, irrespective of their gender, race, and ethnicity. This research investigates the financial performance of businesses in France after the introduction of gender quotas in 2011. We use linear regressions to validate the effect of female’s ratio on Return on Asset (ROA) before and after the regulation is applied by comparing variables such as ROA, board size, asset, and female’s ratio of the sample in 2011 and 2019. Our findings show that there are changes in ROA and Female’s ratio as quotas are implemented. However, there is no proof that quotas have a statistically relevant effect on ROA. On the other hand, research into a male-dominated sector demonstrate that the female’s ratio has a negative impact on ROA. I find out several reasons for this finding and propose some policy recommendation which might increase gender equality and ensure the company performance at the same time.