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

Author

Listed:
  • Ferrari, Giulia

    (INED, France)

  • Ferraro, Valeria

    (Boston College)

  • Profeta, Paola

    () (Bocconi University)

  • Pronzato, Chiara D.

    () (University of Turin)

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.

Suggested Citation

  • Ferrari, Giulia & Ferraro, Valeria & Profeta, Paola & Pronzato, Chiara D., 2018. "Do Board Gender Quotas Matter? Selection, Performance and Stock Market Effects," IZA Discussion Papers 11462, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11462
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    References listed on IDEAS

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    More about this item

    Keywords

    education; age; financial markets;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)

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