Which Relationship between Gender Diversity, Intellectual Capital and Financial Performance?

Some would argue that gender diversity, both in ownership and in board of directors, can affect both financial performance and intellectual capital (IC) performance, and that the latter, in turn, can affect financial performance. This leads to hypothesise that IC performance can be a mediator in the relationship between gender diversity, in ownership or board of directors, and financial performance. As this hypothesis does not appear to have had an adequate investigation in literature, this paper aims to investigate if IC performance can be considered as a mediator in the relationship between gender diversity and financial performance. The test of this hypothesis is performed applying the multiple regression model suggested by Baron and Kenny (1986) to a sample of Italian small and medium-sized enterprises (SMEs). The study shows that gender diversity in ownership negatively impacts on financial performance, directly and indirectly, and that gender diversity in board of directors negatively impacts on financial performance, only indirectly. The indirect effects are due to the negative impact of gender diversity, both in ownership and in board of directors, on IC performance. IC performance plays the role of mediator in the relationship between gender diversity and financial performance. The mediating effect is partial regarding gender diversity in ownership. It is perfect concerning gender diversity in board of directors. This study contributes to the extant literature about the relationships between gender diversity, IC performance and financial performance by offering a systemic analysis of these three items that tend to be investigated separately.