IDEAS home Printed from https://ideas.repec.org/p/mod/depeco/0208.html
   My bibliography  Save this paper

Gender quota on corporate boards in Italy: spillover effects and financial performance

Author

Listed:
  • Barbara Pistoresi
  • Erica Poma
  • Alberto Rinaldi

Abstract

This paper analyzes the impact of the introduction of mandatory gender quotas for the boards of directors of listed firms and state-participated companies (LP) in Italy. It investigates its effects on firms directly targeted by the new regulation as well as its indirect effects on firms that are not. To this aim, we use difference-in-difference and panel fixed-effects estimations. Our main results are that quotas directly increased female presence on boards of LP companies and produced some “positive spillover effects†, i.e., a higher proportion of women in top executive positions in LP firms and a higher share of women on boards of non-listed firms and non-participated firms (NLNP), even if the latter were not targeted by the law. We also find evidence for a positive impact of higher board gender diversity on firm performance in specific conditions, such as boards of small size and NLNP companies.

Suggested Citation

  • Barbara Pistoresi & Erica Poma & Alberto Rinaldi, 2022. "Gender quota on corporate boards in Italy: spillover effects and financial performance," Department of Economics 0208, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    • Handle: RePEc:mod:depeco:0208
    as

    Download full text from publisher

    File URL: http://155.185.68.2/wpdemb/0208.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Audinga Baltrunaite & Mario Cannella & Sauro Mocetti & Giacomo Roma, "undated". "Board composition and performance of state-owned enterprises: Quasi-experimental evidence," Temi di discussione (Economic working papers) 1328, Bank of Italy, Economic Research and International Relations Area.
    2. Bozzano, Monica, 2017. "On the historical roots of women's empowerment across Italian provinces: religion or family culture?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 24-46.
    3. Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58, January.
    4. Milton Harris & Artur Raviv, 2008. "A Theory of Board Control and Size," The Review of Financial Studies, Society for Financial Studies, vol. 21(4), pages 1797-1832, July.
    5. David A. Matsa & Amalia R. Miller, 2013. "A Female Style in Corporate Leadership? Evidence from Quotas," American Economic Journal: Applied Economics, American Economic Association, vol. 5(3), pages 136-169, July.
    6. Schwartz-Ziv, Miriam, 2017. "Gender and Board Activeness: The Role of a Critical Mass," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 52(2), pages 751-780, April.
    7. Genny Bonomi & Giorgio Brosio & Maria Laura Di Tommaso, 2013. "The Impact of Gender Quotas on Votes for Women Candidates: Evidence from Italy," Feminist Economics, Taylor & Francis Journals, vol. 19(4), pages 48-75, October.
    8. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    9. Yermack, David, 1996. "Higher market valuation of companies with a small board of directors," Journal of Financial Economics, Elsevier, vol. 40(2), pages 185-211, February.
    10. Luca Flabbi & Mario Macis & Andrea Moro & Fabiano Schivardi, 2019. "Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance," The Economic Journal, Royal Economic Society, vol. 129(622), pages 2390-2423.
    11. Christopher S. Tuggle & David G. Sirmon & Christopher R. Reutzel & Leonard Bierman, 2010. "Commanding board of director attention: investigating how organizational performance and CEO duality affect board members' attention to monitoring," Strategic Management Journal, Wiley Blackwell, vol. 31(9), pages 946-968, September.
    12. Maggian, Valeria & Montinari, Natalia, 2017. "The spillover effects of gender quotas on dishonesty," Economics Letters, Elsevier, vol. 159(C), pages 33-36.
    13. Christy Glass & Alison Cook & Alicia R. Ingersoll, 2016. "Do Women Leaders Promote Sustainability? Analyzing the Effect of Corporate Governance Composition on Environmental Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 25(7), pages 495-511, November.
    14. Gul, Ferdinand A. & Srinidhi, Bin & Ng, Anthony C., 2011. "Does board gender diversity improve the informativeness of stock prices?," Journal of Accounting and Economics, Elsevier, vol. 51(3), pages 314-338, April.
    15. Giulia Ferrari & Valeria Ferraro & Paola Profeta & Chiara Pronzato, 2022. "Do Board Gender Quotas Matter? Selection, Performance, and Stock Market Effects," Management Science, INFORMS, vol. 68(8), pages 5618-5643, August.
    16. Nina Smith & Valdemar Smith & Mette Verner, 2006. "Do women in top management affect firm performance?A panel study of 2,500 Danish firms," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 55(7), pages 569-593, October.
    17. Maria Boutchkova & Angelica Gonzalez & Brian G.M. Main & Vathunyoo Sila, 2021. "Gender diversity and the spillover effects of women on boards," Corporate Governance: An International Review, Wiley Blackwell, vol. 29(1), pages 2-21, January.
    18. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    19. 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.
    20. Ramzi Ben Slama & Aymen Ajina & Faten Lakhal, 2019. "Board gender diversity and firm financial performance in France: Empirical evidence using quantile difference-in-differences and dose-response models," Cogent Economics & Finance, Taylor & Francis Journals, vol. 7(1), pages 1626526-162, January.
    21. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    22. Martin Conyon & Simon Peck, 1998. "Board size and corporate performance: evidence from European countries," The European Journal of Finance, Taylor & Francis Journals, vol. 4(3), pages 291-304.
    23. Carbonero, Francesco & Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2021. "Women on board and firm export attitudes: Evidence from Italy," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 159-175.
    24. Rania Beji & Ouidad Yousfi & Nadia Loukil & Abdelwahed Omri, 2021. "Board Diversity and Corporate Social Responsibility: Empirical Evidence from France," Journal of Business Ethics, Springer, vol. 173(1), pages 133-155, September.
    25. Karen Watkins-Fassler & Sherma Muller, 2021. "Board composition and bank performance in a small island developing state: The case of Curacao," Estudios Gerenciales, Universidad Icesi, vol. 37(161), pages 590-600, October.
    26. Simona Comi & Mara Grasseni & Federica Origo & Laura Pagani, 2020. "Where Women Make a Difference: Gender Quotas and Firms’ Performance in Three European Countries," ILR Review, Cornell University, ILR School, vol. 73(3), pages 768-793, May.
    27. 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).
    28. Jan Luca Pletzer & Romina Nikolova & Karina Karolina Kedzior & Sven Constantin Voelpel, 2015. "Does Gender Matter? Female Representation on Corporate Boards and Firm Financial Performance - A Meta-Analysis," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-20, June.
    29. Vincenzo Scafarto & Federica Ricci & Elisabetta Magnaghi & Salvatore Ferri, 2021. "Board structure and intellectual capital efficiency: does the family firm status matter?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 841-878, September.
    30. Juan Francisco Martín-Ugedo & Antonio Minguez-Vera, 2014. "Firm Performance and Women on the Board: Evidence from Spanish Small and Medium-Sized Enterprises," Feminist Economics, Taylor & Francis Journals, vol. 20(3), pages 136-162, July.
    31. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    32. Sonia Boukattaya & Abdelwahed Omri, 2021. "Impact of Board Gender Diversity on Corporate Social Responsibility and Irresponsibility: Empirical Evidence from France," Sustainability, MDPI, vol. 13(9), pages 1-14, April.
    33. Liu, Yu & Wei, Zuobao & Xie, Feixue, 2014. "Do women directors improve firm performance in China?," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 169-184.
    34. Øyvind Bøhren & Siv Staubo, 2016. "Mandatory Gender Balance and Board Independence," European Financial Management, European Financial Management Association, vol. 22(1), pages 3-30, January.
    35. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    36. Kenneth R. Ahern & Amy K. Dittmar, 2012. "The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 137-197.
    37. Greene, Daniel & Intintoli, Vincent J. & Kahle, Kathleen M., 2020. "Do board gender quotas affect firm value? Evidence from California Senate Bill No. 826," Journal of Corporate Finance, Elsevier, vol. 60(C).
    38. Jeong Jin Yu & Guy Madison, 2021. "Gender quotas and company financial performance: A systematic review," Economic Affairs, Wiley Blackwell, vol. 41(3), pages 377-390, October.
    39. Jurkus, Anthony F. & Park, Jung Chul & Woodard, Lorraine S., 2011. "Women in top management and agency costs," Journal of Business Research, Elsevier, vol. 64(2), pages 180-186, February.
    40. Eisenberg, Theodore & Sundgren, Stefan & Wells, Martin T., 1998. "Larger board size and decreasing firm value in small firms," Journal of Financial Economics, Elsevier, vol. 48(1), pages 35-54, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Del Prete, Silvia & Papini, Giulio & Tonello, Marco, 2024. "Gender quotas, board diversity and spillover effects. Evidence from Italian banks," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 148-173.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laura Cabeza-García & Esther B. Brío & Carlos Rueda, 2021. "The moderating effect of innovation on the gender and performance relationship in the outset of the gender revolution," Review of Managerial Science, Springer, vol. 15(3), pages 755-778, April.
    2. Fabrizio Rossi & Richard J. Cebula & James R. Barth, 2018. "Female representation in the boardroom and firm debt: empirical evidence from Italy," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 42(2), pages 315-338, April.
    3. Đặng, Rey & Houanti, L’Hocine & Reddy, Krishna & Simioni, Michel, 2020. "Does board gender diversity influence firm profitability? A control function approach," Economic Modelling, Elsevier, vol. 90(C), pages 168-181.
    4. Franco Ernesto Rubino & Paolo Tenuta & Domenico Rocco Cambrea, 2017. "Board characteristics effects on performance in family and non-family business: a multi-theoretical approach," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(3), pages 623-658, September.
    5. Sanjukta Brahma & Chioma Nwafor & Agyenim Boateng, 2021. "Board gender diversity and firm performance: The UK evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5704-5719, October.
    6. Tleubayev, Alisher & Bobojonov, Ihtiyor & Gagalyuk, Taras & Glauben, Thomas, 2020. "Board gender diversity and firm performance: Evidence from the Russian agri-food industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23(1), pages 35-53.
    7. Greene, Daniel & Intintoli, Vincent J. & Kahle, Kathleen M., 2020. "Do board gender quotas affect firm value? Evidence from California Senate Bill No. 826," Journal of Corporate Finance, Elsevier, vol. 60(C).
    8. Jong-Min Kim & Chanho Cho & Chulhee Jun & Won Yong Kim, 2020. "The Changing Dynamics of Board Independence: A Copula Based Quantile Regression Approach," JRFM, MDPI, vol. 13(11), pages 1-21, October.
    9. Huang, Yichu & Fang, Feifei & Fan, Yaoyao & Ly, Kim Cuong, 2024. "Do ‘Lehman Sisters’ work in China? Women on boards and bank risk," International Review of Financial Analysis, Elsevier, vol. 93(C).
    10. Garanina, Tatiana & Muravyev, Alexander, 2021. "The gender composition of corporate boards and firm performance: Evidence from Russia," Emerging Markets Review, Elsevier, vol. 48(C).
    11. Nguyen, Tuan & Locke, Stuart & Reddy, Krishna, 2015. "Does boardroom gender diversity matter? Evidence from a transitional economy," International Review of Economics & Finance, Elsevier, vol. 37(C), pages 184-202.
    12. Baghdadi, Ghasan A. & Safiullah, Md & Heyden, Mariano L.M., 2023. "Do gender diverse boards enhance managerial ability?," Journal of Corporate Finance, Elsevier, vol. 79(C).
    13. Sikarwar, Ekta, 2022. "Board attributes, hedging activities and exchange rate risk: Multi-country firm-level evidence," Economic Modelling, Elsevier, vol. 110(C).
    14. Rizwan Ali & Muhammad Safdar Sial & Talles Vianna Brugni & Jinsoo Hwang & Nguyen Vinh Khuong & Thai Hong Thuy Khanh, 2019. "Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms," Sustainability, MDPI, vol. 12(1), pages 1-17, December.
    15. Miloud, Tarek, 2024. "Corporate governance and CSR disclosure: Evidence from French listed companies," Global Finance Journal, Elsevier, vol. 59(C).
    16. Leonardo Gambacorta & Alessio Reghezza & Martina Spaggiari & Livia Pancotto, 2022. "Gender diversity in bank boardrooms and green lending: evidence from euro area credit register data," BIS Working Papers 1044, Bank for International Settlements.
    17. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, July.
    18. Nguyen, Tuan & Locke, Stuart & Reddy, Krishna, 2014. "A dynamic estimation of governance structures and financial performance for Singaporean companies," Economic Modelling, Elsevier, vol. 40(C), pages 1-11.
    19. Wongsinhirun, Nopparat & Chatjuthamard, Pattanaporn & Jiraporn, Pornsit, 2023. "Corporate culture and board gender diversity: Evidence from textual analysis," International Review of Financial Analysis, Elsevier, vol. 86(C).
    20. Sila, Vathunyoo & Gonzalez, Angelica & Hagendorff, Jens, 2016. "Women on board: Does boardroom gender diversity affect firm risk?," Journal of Corporate Finance, Elsevier, vol. 36(C), pages 26-53.

    More about this item

    Keywords

    Gender quotas; firm performance; panel data; women directors; spillover effects; female executives;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mod:depeco:0208. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sara Colombini (email available below). General contact details of provider: https://edirc.repec.org/data/demodit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.