Gender Quotas, Firm Performance, and Spillover Effects. Evidence from Italy

This paper investigates the impact of mandatory gender quotas for boards of directors of listed and state-owned (lp) companies in Italy and the indirect effects on companies not affected by the new legislation (nlnp). It also analyzes the correlation between female representation on boards on firm financial performance. To this aim, we consider the top 250 Italian firms by total assets in 2017, the year in which the Golfo-Mosca Law (gml) that introduced mandatory gender quotas in Italy had been fully implemented selecting a panel of the 116 firms that were among the top 250 also in 2010, the year preceding the enactment of the gml. A panel estimation with fixed-effects is used. Our main findings are: i) the gml increased the number of women directors in lp firms; ii) the number of women executives in these firms increased significantly, although this was not one of the provisions of the law; iii) the gml also induced a significant increase of women directors on boards in nlnp firms, even if the latter were not mandated by the law; iv) the gml produced no direct positive effect on firm financial performance. However, a higher proportion of women directors is positively and significantly related with firm performance in the case that they sit on small boards or they take up an executive position. This holds for both lp and nlnp firms. The results for nlnp firms suggest that, despite their corrective nature, gender quotas may contribute to trigger a wider cultural change and promote a more radical social transformation than their current political agenda reveals