EQUITY BEYOND EQUALITY: WOMEN’S LEADERSHIP, OWNERSHIP AND PAY GAP IN EUROPEAN SMEs

Purpose: This study investigates the interplay between women leadership and ownership structure in shaping gender pay disparities within the European SMEs. It specifically examines how the presence of women in top leadership roles influences the gender pay gap across publicly owned and family-owned enterprises, thereby contributing to the broader discourse on governance, equity, and organizational performance. Design/methodology/approach: Drawing on a panel dataset comprising 1,050 firm-level observations from European listed companies from 2010 to 2023, the study employs a high-dimensional fixed effects (HDFE) econometric model to estimate the determinants of wage inequality. The analysis is situated within a dual theoretical framework, Agency Theory and Social Role Theory, to elucidate the mechanisms through which gender representation, institutional ownership, and cultural norms influence pay structures. The empirical strategy incorporates interaction terms to assess the moderating effects of ownership type on the relationship between female leadership and the gender pay gap. Findings: The results indicate a robust and statistically significant negative association between women’s board representation and the gender pay gap. This relationship is particularly pronounced in public-owned enterprises, where institutional oversight and public accountability appear to enhance the efficacy of inclusive leadership. Conversely, in family-owned firms, greater women’s representation is paradoxically associated with an increase in wage disparities, suggesting the presence of enduring patriarchal norms and informal power structures that may undermine formal equality initiatives. Additional findings reveal that board independence and ESG performance contribute to reducing the pay gap, while traditional financial performance indicators exhibit limited explanatory power in this context. Practical and social implications: The findings yield actionable insights for both policymakers and corporate stakeholders. In the public sector, reinforcing gender-inclusive governance frameworks can yield tangible equity outcomes. In contrast, interventions in family-owned enterprises must account for embedded cultural dynamics that may resist surface-level reforms. Recommended policy measures include the enforcement of pay transparency legislation, the introduction of gender-equitable hiring and promotion practices, and the provision of structural supports such as childcare services and flexible work arrangements. These initiatives are essential for equitable labor market outcomes in an industry historically marked by gender imbalance. Originality of the study: This research offers a novel contribution to the literature by providing a comparative, ownership-specific analysis of gender pay dynamics within the ICT sector, an industry characterized by both high wage inequality and persistent gender underrepresentation. Through its integration of institutional theory, gender studies, and econometric modeling, the study advances understanding of how structural and cultural variables jointly condition the impact of female leadership on pay equity.