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This paper investigates the impact of gender quotas on firm performance using countries worldwide that have introduced a gender quota as a quasi-natural experiment. Our statistical analysis shows that board members’ characteristics significantly change after implementing the gender quota. The results of our empirical analysis provide evidence that gender quotas reduce the cost of equity in the short term but decrease the Tobin’s Q in the long term and have a neutral impact on profitability in the short term and the longer term. Our findings support the argument that policymakers can force firms to achieve a gender-balanced representation on corporate boards through a mandatory quota without generating adverse effects on their performance in the short term; however, a negative impact on their Tobins’ Q can be expected in the long term. Our results also suggest that policymakers create unrealistic expectations for women to boost firm performance.