Gender Diversity Summary

Does gender diversity on Indian boards impede IPO underpricing?

Amanpreet Kaur and Balwinder Singh (2015) continuing Balasubramanian (2013) work, took a look at the reduction in underpricing from the presence of female directors in an IPO.This is because going public is a key event in any corporation. As there is no prior history/reputation it is key to give positive signals to investors. Prior research has shown the benefits of female directors, but there is conflicting research of the effect on IPO underpricing. Most in the USA have shown a positive correlation while most elsewhere have not. They analyzed 230 indian ipos from May 1, 2007 to 31 March 2013. They used underpricing dependent variable, female directors as the independent variables. The main control Variables where the size and age, which were normalized using a natural logarithm, these showed a negative effect on underpricing. Oversubscription and listing delays which have a   positive correlation with underpricing. Board size, Qualification of women, age of females, other directorships held by women>>>>>>>>. They found that gender diversity overall did not have an effect on IPO underpricing. With the recent increase in the demand for female directors their presence is currently too limited in the market to accurately measure the effects. As the author mentions   most studies in the US showed a positive correlation while elsewhere did not. They do not mention other developed nations. It would be interesting to conduct the analysis in the eurozone, canada, etc. This would tell us if it is only an developed world phenomenon.

Amanpreet Kaur and Balwinder Singh (2015) study the effect of gender diversity on underpricing. The average IPO underpricing was 14%. Female firms is approximately 4 per cent less than under-pricing experienced by male-led IPOs, and the max value of underpricing is more than double seen in male dominated firms. In india these were correlated but not statistically...