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

Giulia Ferrari, Valeria Ferraro, Paola Profeta () and Chiara Pronzato ()
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Giulia Ferrari: INED, France
Valeria Ferraro: Boston College

No 11462, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: education; age; financial markets (search for similar items in EconPapers)
JEL-codes: J20 J48 J78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gen and nep-lma
Date: 2018-04
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