How do Markets React to Women Leaders? An IPO investigation?

The growing global emphasis on diversity, equity, and inclusion has also put the spotlight on the role of gender in the corporate world. Extant literature has also discussed the competitive advantage firms can gain by leveraging the potential of women in the workplace. Women have increasingly found a place on boards owing to regulatory changes, but there is much less research on the representation of women in top and senior management teams (TSMT). Given the increasing value associated with gender diversity and meeting DEI goals, why is the representation of women still so low in TSMT? This paper explores a demand-side story by examining how investors react to the presence of women in TSMT through the subscription response to Initial Public Offerings (IPOs) with gender diversity in top management teams. Using two recent IPO waves in the Indian market, a country that has recently mandated gender-diverse boards and ESG disclosures, this study focuses on subscription levels of IPOs by investor type and their inclusion of women in TSMT, which remains an unregulated space. The results show that informed investors demand gender diversity and subscribe more to IPOs of firms with women representation in TSMT. An understanding of how markets react to women leaders will not only contribute to capital-raising decisions but also inform policy and society.

About the Speaker

Prof. Debarati is in the Finance, Accounting, and Control area at the School of Management and Entrepreneurship (SME) at Shiv Nadar Institution of Eminence. Her research contributes to financial reporting and corporate finance and primarily focuses on their interactions with corporate governance. The dynamics of corporate control intrigue her. Her current project on internationalization explores market entry, cross-border M&A and investments, and the role of institutions and history. Some of her recent work also focuses on diversity, networks and investor preferences. Prior to SNU, she worked at IIM Bangalore and XLRI Jamshedpur. Her papers have appeared in the Journal of Contemporary Accounting and Economics, Applied Economics, Social Indicators Research, and Asian Review of Accounting, among others.