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February 12, 2015 Why Are Successful Female-Led IPOs a "Rare Phenomenon"? Even though women-owned firms represent almost half of U.S. new businesses, female founders and CEOs of start-ups fared poorly in an IPO simulation involving MBA students, says a team led by Lyda Bigelow of the University of Utah. For example, the amount of money that participants recommended for investment in a fictionalized initial public offering for a cosmetic-surgery company was almost 4 times higher if the CEO was identified as male; moreover, the anticipated share price of IPOs led by male CEOs was approximately 11% higher than those of female-led IPOs, suggesting that bias explains why successful female-led IPOs are an "extremely rare phenomenon," the researchers say. SOURCE: Skirting the Issues: Experimental Evidence of Gender Bias in IPO Prospectus Evaluations

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