How Different Institutional Logics Affect the Female CEO Gender Effect on IPO Underpricing in China

Abstract

Female entrepreneurs and CEOs generally face greater challenges in securing funding to exploit entrepreneurial opportunities, yet contextual factors under which such challenges are more likely to arise are less understood. We find that female-led initial public offerings (IPOs) incur greater IPO underpricing, but this effect is moderated by their ownership structure, reflecting different institutional logics in which these firms operate. Specifically, the positive relationship between female CEOs and IPO underpricing is attenuated by venture capitalist ownership, whereas such a relationship is exacerbated by state ownership. Based on a sample of 958 IPOs in China between 2009 and 2015, this study corroborates these findings.