Working Paper
The authors find that IPOs experience significantly greater underpricing when the firm’s board has at least one
female director, relative to when no women sit on the board. The underpricing effect is not attributable
to differences in profitability, growth opportunities, CSR profiles, or other firm characteristics.
Instead, the presence of women on the board appears to create value because of a reduction in the cost of
capital for these firms, driven by increased institutional investor demand for board gender diversity.
The authors find evidence that underwriters with greater network centrality are better able to value board gender
diversity, reducing the underpricing effect.
Faculty
Emeritus Professor of Finance
