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Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance

Author

Listed:
  • Luca Flabbi
  • Mario Macis
  • Andrea Moro
  • Fabiano Schivardi

Abstract

We investigate the effects of female executives on gender-specific wage distributions and firm performance. Female leadership has a positive impact at the top of the female wage distribution and a negative impact at the bottom. The impact of female leadership on firm performance increases with the share of female workers. We account for the endogeneity induced by non-random executives’ gender by including firm fixed-effects, by generating controls from a two-way fixed-effects regression and by using instruments based on regional trends. The findings are consistent with a model of statistical discrimination in which female executives are better at interpreting signals of productivity from female workers. This suggests substantial costs of women under-representation among executives.

Suggested Citation

  • 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.
    • Handle: RePEc:oup:econjl:v:129:y:2019:i:622:p:2390-2423.
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    File URL: http://hdl.handle.net/10.1093/ej/uez012
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    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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