Does gender diversity on boards mitigate IPO underpricing? An analysis of the Norwegian market

Abstract

This paper aims to contribute to the limited research on how female board members influence IPO underpricing. We use OLS regression to analyze a sample of 325 Norwegian IPOs from 2004 to 2023 and find that gender-diverse boards are 8.5 percentage points less underpriced than fully male boards. Additionally, going from a fully male board to a fully female board reduces underpricing with 18.5 percentage points. While our results are not statistically significant, they suggest that female directors are viewed as a quality signal by investors. The economic significance of our results underscores the importance of understanding gender balance in corporate boardrooms, particularly in relation to IPOs.