Spillover Effects in Board Structure: Evidence from SB 826
Peer effects have been found to exist in a variety of contexts, but it is uncertain whether an exogenous shock to board governance structure of a subset of firms can affect the governance structure of peer firms. I test this proposition in a board structure setting using the swift and unexpected passage of California law SB 826, which mandated that all publicly traded California-headquartered firms have at least one female director by the end of 2019. I predict and find a significant increase in the likelihood of new female director appointments for non-California peer firms following the passage of SB 826. Further, and consistent with theory, the likelihood of a new female appointment is significantly stronger for peer firms that are more closely connected to California firms. My results not only speak to the demand for gender diversity in governance practices but also provide novel empirical evidence that a shock to the board governance structure of a subset of firms can spillover to other peer firms.
Accounting, board structure, female, gender diversity, governance, peer effects, SB 826
Networked Digital Library of Theses and Dissertations