Do Board Gender Quotas Matter? Selection, Performance and Stock Market Effects

52 Pages Posted: 2 May 2018

See all articles by Giulia Ferrari

Giulia Ferrari

National Institute of Demographic Studies (INED)

Valeria Ferraro

Boston College

Paola Profeta

Bocconi University - Department of Policy Analysis and Public Management; CESifo (Center for Economic Studies and Ifo Institute)

Chiara Pronzato

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

Abstract

From business to politics and academia, the economic effects of the introduction of gender quotas are under scrutiny. We provide new evidence based on the introduction of mandatory gender quotas for boards of directors of Italian companies listed on the 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, 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 both the announcement and 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: J20, J48, J78

Suggested Citation

Ferrari, Giulia and Ferraro, Valeria and Profeta, Paola and Pronzato, Chiara, Do Board Gender Quotas Matter? Selection, Performance and Stock Market Effects. IZA Discussion Paper No. 11462. Available at SSRN: https://ssrn.com/abstract=3170251

Giulia Ferrari (Contact Author)

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

Bocconi University - Department of Policy Analysis and Public Management ( email )

Via Roentgen 1
Milan, 20136
Italy

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Chiara Pronzato

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

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
60
rank
348,812
Abstract Views
226
PlumX Metrics