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Gender Quotas: Challenging the Boards, Performance, and the Stock Market

Author

Listed:
  • Giulia Ferrari
  • Valeria Ferraro
  • Paola Profeta
  • Chiara Pronzato
Abstract
In 2011, Italy introduced gender quotas for boards of directors of companies listed on its stock market. Comparing before and after the reform within firms, we find that quotas are associated with a higher share of female board directors, higher levels of education of board members, and a lower share of older members. We then use the reform period as an instrument for the share of female directors and find no significant impact on firms’ performance. Interestingly, we find that the share of female directors is associated with a lower variability of stock market prices. We also run event studies on the stock price reaction to the introduction of gender quotas. A positive effect of the quota law on stock market returns emerges at the date of the board’s election. Our results are consistent with gender quotas giving rise to a beneficial restructuring of the board, which is positively received by the market.

Suggested Citation

  • Giulia Ferrari & Valeria Ferraro & Paola Profeta & Chiara Pronzato, 2016. "Gender Quotas: Challenging the Boards, Performance, and the Stock Market," CESifo Working Paper Series 6084, CESifo.
    • Handle: RePEc:ces:ceswps:_6084
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    Cited by:

    1. Owen, Ann L. & Temesvary, Judit, 2018. "The performance effects of gender diversity on bank boards," Journal of Banking & Finance, Elsevier, vol. 90(C), pages 50-63.
    2. Donato Masciandaro & Paola Profeta & Davide Romelli, 2023. "Women and Governance: Central Bank Boards and Monetary Policy," Trinity Economics Papers tep1123, Trinity College Dublin, Department of Economics.
    3. Rebérioux, Antoine & Roudaut, Gwenael, 2016. "Gender Quota inside the Boardroom: Female Directors as New Key Players?," CEPREMAP Working Papers (Docweb) 1603, CEPREMAP.
    4. Simon Jäger & Benjamin Schoefer & Jörg Heining, 2021. "Labor in the Boardroom," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(2), pages 669-725.
    5. Hinrichsen, Anna & Schiereck, Dirk & von Ahsen, Anette, 2018. "Gender Diversity Issues Within the Company and Beyond: Perceptions of Investor Relations Professionals in German-Speaking Europe," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 72(2), pages 109-125.
    6. Bennouri, Moez & De Amicis, Chiara & Falconieri, Sonia, 2020. "Welcome on board: A note on gender quotas regulation in Europe," Economics Letters, Elsevier, vol. 190(C).
    7. Marianne Bertrand & Sandra E Black & Sissel Jensen & Adriana Lleras-Muney, 2019. "Breaking the Glass Ceiling? The Effect of Board Quotas on Female Labour Market Outcomes in Norway," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 191-239.
    8. Paul B. McGuinness & João Paulo Vieito & Mingzhu Wang, 2020. "Proactive government intervention, board gender balance, and stakeholder engagement in China and Europe," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 719-762, September.
    9. Lennart Struth & Max Thon, 2022. "Discrimination, Quotas, and Stereotypes," ECONtribute Discussion Papers Series 188, University of Bonn and University of Cologne, Germany.
    10. Vincenzo Galasso, 2020. "Market Reactions to Quest for Decentralization and Independence: Evidence from Catalonia," CESifo Working Paper Series 8254, CESifo.
    11. Anaïs Périlleux & Ariane Szafarz, 2022. "Women in the boardroom: a bottom–up approach to the trickle-down effect," Small Business Economics, Springer, vol. 58(4), pages 1783-1800, April.
    12. repec:ces:ifodic:v:15:y:2017:i:2:p:26-30 is not listed on IDEAS
    13. Kuzmina, Olga & Melentyeva, Valentina, 2020. "Gender diversity in corporate boards: Evidence from quota-implied discontinuities," CEPR Discussion Papers 14942, C.E.P.R. Discussion Papers.
    14. Donato Masciandaro & Paola Profeta & Davide Romelli, 2020. "Do Women Matter in Monetary Policy Boards?," BAFFI CAREFIN Working Papers 20148, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    15. Stefania Veltri & Romilda Mazzotta & Franco Ernesto Rubino, 2021. "Board diversity and corporate social performance: Does the family firm status matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1664-1679, November.
    16. repec:ces:ifodic:v:15:y:2017:i:2:p:19337559 is not listed on IDEAS
    17. Alessandro Manello & Maurizio Cisi & Francesco Devicienti & Davide Vannoni, 2020. "Networking: a business for women," Small Business Economics, Springer, vol. 55(2), pages 329-348, August.
    18. Antoine Rebérioux & Gwenael Roudaut, 2017. "Gender Quota and Inequalities inside the Boardroom," Working Papers hal-01618949, HAL.
    19. Silvia Del Prete & Maria Lucia Stefani, 2021. "Women as “gold dust”: Gender diversity in top boards and the performance of Italian banks," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 50(2), July.
    20. Paola Profeta, 2017. "Gender Quotas and Efficiency," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(02), pages 26-30, August.

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    More about this item

    Keywords

    education; age; financial markets;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)

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