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Comments on David Matsa and Amalia Miller
“A Female Style in Corporate Leadership?
Evidence from Quotas”
Justin Wolfers
Wharton School, University of Pennsylvania
Brookings, CEPR, CESifo, IZA and NBER
NBER Law and Economics Summer Institute, Cambridge, July 28 2011.
Research question
Justin Wolfers, Comments on Matsa & Miller 2
� What are the effects of Norway mandating women on boards during a global financial crisis?
� What are the effects of mandating women on boards?
� Is there a female style in corporate leadership?
Evidence and Persuasion
Justin Wolfers, Comments on Matsa & Miller 3
Ho
w p
ers
ua
siv
e t
he
p
ap
er
is
How big the coefficient is
Bayesian
Popperian
Skeptical economist
Causal estimates of the effects of the mandate:
Justin Wolfers, Comments on Matsa & Miller 4
On firm outcomes:
� Return on Assets (=operating profit / assets): -4.0%� Mean: +3.4%
� Standard deviation: 17.5%
� Employment: +35% � All through less firing
On board composition
� Female share of board directors: +17%Interpretation:
� Estimating causal effects of one more female director
� Instrumental variables interpretation
� Wald estimator = ������������� �����
����������������������
� Implied effects of all-female boards is huge
How big is the experiment?
Justin Wolfers, Comments on Matsa & Miller 5
Mandate requires appointing women to boards
But not to the executive committee
Spain passed a similar law in 2007
France just passed a similar law
What’s missing?
Justin Wolfers, Comments on Matsa & Miller 6
� An analogy: What if they studied Saudi Arabia instead of Norway?
Oil
Justin Wolfers, Comments on Matsa & Miller 7
Annual Oil Production
Justin Wolfers, Comments on Matsa & Miller 8
0 100 200 300 400 500
QatarKuwait
Equatorial GuineaUnited Arab Emirates
NorwayBrunei
Saudi ArabiaLibyaOmanGabon
Virgin IslandsTrinidad & Tobago
AngolaAzerbaijan
CanadaVenezuela
KazakhstanIraq
East TimorRussia
BahrainCongroAlgeria
IranDenmarkEcuador
TurkmenistanMexico
MalaysiaAustralia
USAUK
Annual barrels per capita
Footnote 19
Justin Wolfers, Comments on Matsa & Miller 9
“In a related exercise we also
confirmed that the results are
unchanged if we exclude
companies in the petroleum
industry from the analysis.”
The logic of diffs-in-diffs-in-diffs
Justin Wolfers, Comments on Matsa & Miller 10
� Differencing strategy works if confounding unobserved factors are:
A. Common to the listed and unlisted sectors in Norway, Sweden and Finland
B. And have the same effect on the relative performance of the listed and listed sectors in Norway, Sweden and Finland
� Questions:
� Are the shocks common?
� Are the effects similar?
Labor economists assume yes (differencing)
Finance economists don’t—estimating firm-specific �’s
� Are the confounding shocks small?
Oil Prices
Justin Wolfers, Comments on Matsa & Miller 11
$0
$20
$40
$60
$80
$100
$120
$140
$160
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
Oil
Pri
ce (
$ p
er
ba
rre
l) Before After
Stock Prices
Justin Wolfers, Comments on Matsa & Miller 12
0
50
100
150
200
250
300
Sto
ck P
rice
In
dic
es
(20
03
=1
00
)
Before After
Norway
Sweden
Finland
General observation
Justin Wolfers, Comments on Matsa & Miller 13
In the wake of the global
financial crisis, we need to be
particularly careful about
intertemporal comparisons.
Ceterus ain’t parribus
