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

69 Pages Posted: 9 Nov 2016  

Giulia Ferrari

National Institute of Demographic Studies (INED)

Valeria Ferraro

Boston College

Paola Profeta

Bocconi University

Chiara Pronzato

University of Essex - Institute for Social and Economic Research (ISER)

Multiple version iconThere are 2 versions of this paper

Date Written: September 27, 2016

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.

Keywords: education, age, financial markets

JEL Classification: J200, J480, J780

Suggested Citation

Ferrari, Giulia and Ferraro, Valeria and Profeta, Paola and Pronzato, Chiara, Gender Quotas: Challenging the Boards, Performance, and the Stock Market (September 27, 2016). CESifo Working Paper Series No. 6084. Available at SSRN: https://ssrn.com/abstract=2866376

Giulia Ferrari

National Institute of Demographic Studies (INED) ( email )

133 Bd Davout
Paris cedex 20, France 75980
France

Valeria Ferraro

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Paola Profeta (Contact Author)

Bocconi University ( email )

Milan, MI
Italy

Chiara Pronzato

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

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