Abstract
Purpose This paper aims to examine empirically the impact of gender diversity on corporate performance by both comparing different positions occupied by female directors on the boards and their personal-specific characteristics. Design/methodology/approach The paper examines a sample of Italian listed companies during 2006–2015. To deal with endogeneity issues, the authors use a generalized method of moments as an empirical methodology. Findings The empirical findings show that the positive effect of both independent and executive women directors on firm performance is moderated by the specific characteristics of female directors. Specifically, the analyses show that foreign and busy females negatively impact on performance. Conversely, graduate female directors strengthen the positive link between executive women and firm performance. Originality/value The paper sheds light on the consequences of appointing different types of female directors (i.e. independent, executive, graduate, foreign and busy) on firm performance. Our empirical research that investigates the association between gender diversity and performance in the Italian context based on a longitudinal study, which involves a period of ten years, allowing consideration both of the years before and after the introduction of the gender quota law (Golfo–Mosca law).
Highlights
The topic of gender diversity on the board of directors and in top management is gaining the attention of both academic scholars and policymakers all over the world (Cambrea et al, 2018; Willows and van der Linde, 2016; Zhao and Lord, 2016)
To test our research hypotheses, we followed the empirical approach of previous studies on gender diversity (Liu et al, 2014; Sila et al, 2016; Terjesen et al, 2016) and used the generalized method of moments (GMM), which accounts for both dynamic endogeneity and unobserved heterogeneity in panel data models
Consistent with Smith et al (2006), who show that the proportion of women in top management positions tends to have positive effects on the performance of Danish companies, the results show that the presence of female directors with executive power improves corporate performance
Summary
The topic of gender diversity on the board of directors and in top management is gaining the attention of both academic scholars and policymakers all over the world (Cambrea et al, 2018; Willows and van der Linde, 2016; Zhao and Lord, 2016). Rossi et al (2017) scrutinize 41 Italian listed companies during the period 2005–2013 and display the existence of a strong ability of women directors to affect corporate performance only when they are at least three on the board These empirical studies are limited to investigate the effect of women directors on firm performance either the years before or the subsequent years after the introduction of the gender quota law (Golfo–Mosca law), not enabling to seize the law benefits, expressed in terms of increased participation of women on the boards. The remainder of this study is structured as follows: Section 2 presents a literature review and introduces the hypothesis development; Section 3 explains the sample selection procedure and describes the methodology; whereas Section 4 describes the data, the Five shades of empirical results are presented and discussed in Section 5 and 6; Section 7 presents women the concluding remarks
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