Gender quota laws and firm performance: is there a trade-off?

Purpose The introduction of gender quota laws in many countries has garnered significant attention in the literature and in the political discourse. Proponents of this solution emphasise its potential to bolster opportunities for women, foster their participation on boards of directors and improve corporate governance, market value and firm performance. Conversely, opponents express concerns regarding the possibility of appointing less-qualified women, thereby diminishing board effectiveness and potentially leading to negative consequences on firm market value and performance. This study aims to address this ongoing debate by examining the impact of gender quota laws on firm performance. Design/methodology/approach The impact of gender quota laws on firm performance, measured through ROE, ROA and ROI, is evaluated using a database of 27,977 Italian firms and adopting a two-stage traditional treatment effect model. Findings The econometric analysis reveals a negative impact of the gender quota law on firm performance. Originality/value This study contributes to the academic debate on the pros and cons of imposing gender quota laws by providing empirical evidence on their impact on firm performance.