Board Gender Diversity and IPO Underpricing: The Moderating Role of Managerial Ownership in the Banking Sector (Global Advances in Business Studies)

Summary

• The study analyzes a sample of 21 banks that conducted an IPO on the Indonesia Stock Exchange during 2010–2025 across 12 regression models.p.1
• In Indonesia, female representation in corporate leadership remains modest, with women holding around 8.3% of board seats, 5.2% of board chair positions, and 3.1% of chief-executive roles.p.2
• Among the sampled bank IPOs, the mean first-day initial return (Y1) was 0.2414 (24.14%), expanding to 51.10% over the first seven trading days.p.8
• At the time of listing, 61.90% (13 of 21) of banks had at least one female director (GEND1), and women occupied an average of 24.43% of board seats.p.8
• Managerial ownership is minimal across the sample, averaging 0.0952 because only 2 of 21 banks reported non-zero director shareholdings at IPO.p.8
• Direct regression tests show that the presence of at least one female director (GEND1) is marginally associated with lower first-day underpricing at the 10% level with a coefficient of -0.3038 (p = 0.078).p.9

Key insights

1. Board gender diversity measured as a binary presence (GEND1) exhibits a negative relationship with first-day IPO underpricing at the 10% significance level but is not statistically significant at the 5% level.p.9
2. Continuous measures of gender diversity, including the percentage (GEND2) and count (GEND3) of female directors, do not have a statistically significant effect on IPO underpricing.p.1
3. Managerial ownership does not moderate the relationship between board gender diversity and IPO underpricing across all moderated specifications.p.1
4. The lack of moderating significance for managerial ownership is largely attributable to data constraints, as only 2 of the 21 sampled banks possessed non-zero managerial shareholdings at listing.p.5
5. The marginal reduction in underpricing associated with female board presence observed on the first trading day (H+0) does not persist through the seventh trading day (H+7).p.10
6. The findings are robust to alternative specifications using winsorised seventh-day initial returns and Robust Least Squares estimation.p.10