The effect of rule of law on board gender diversity: a cross-country analysis

Abstract This study investigates whether equality-oriented rule-of-law institutions foster gender diversity on corporate boards. Using an unbalanced panel of 2,375 listed firms from 41 countries over 2014–2022, we proxy legal quality with two World Justice Project dimensions: equal treatment and anti-discrimination enforcement (ROL1) and the effective guarantee of fundamental labour rights (ROL2). We estimate baseline OLS and firm fixed-effects models and address endogeneity through lagged specifications, 2SLS, and system-GMM, while controlling for board and firm characteristics as well as country-year factors including quota strength and macro-labour conditions. Across estimators, stronger rule-of-law environments are generally associated with higher women’s representation on boards. Sub-sample evidence, however, reveals important heterogeneity: The effect of ROL1 is highly context-dependent, significant in non-financial firms and the post-2020 period but statistically insignificant in weak-governance settings and exhibiting substitution effects in strong-governance contexts. By contrast, ROL2 shows a robust positive association across all contexts, which further intensifies in environments with strong governance capacity. These findings suggest that enforceable labour rights provide a universal pipeline mechanism for women’s advancement, while the impact of anti-discrimination norms is conditional on the broader institutional architecture. The study contributes to cross-country corporate governance research by clarifying the conditional channels through which the rule of law shapes board-level gender diversity.