Gender Board Composition and Performance in Italian Start-ups

Abstract

Literature on start-ups has mainly involved functional and education diversity of top teams; gender has been neglected, most likely because of the low presence of women in technological firms. Also, extant research has overlooked the role of female representation in start-ups’ boards, despite boards represent a key piece in the puzzle that enables the functioning and survival of new firms. Building on this gap, we aim to investigate the following research question: are gender-related variables in the board of innovative start-ups correlated with better performance? We employ a novel dataset of 3,257 Italian innovative start-ups founded between 2012 and 2018, and we run eight OLS regressions to estimate performance as a function of measures of female representation. Our results provide evidence of a positive relation of gender-related variables with performance. Specifically, we find that gender diversity is related to an efficient use of assets (ROA), while the shares and the number of females are related to an efficient use of capital (ROE). We also detect a non-linear exponential relation between the number of females in the board and ROE: as more women serve in the board, returns on equity grow more than proportionally. Our paper contributes to the literature on board composition and start-up performance by providing new evidence on the role of female representation.