University Study Finds Women Face Bias in Attracting Investment Dollars

A research study conducted at the University of Utah and Washington University has found a hidden bias women face in attracting investment dollars.

More than 220 students in MBA programs at the universities were given a prospectus and a presentation about an initial public offering that was based on an actual transaction that was handled by Goldman Sachs. Some of the names and photographs of the executives involved were changed to include women rather than men. Students were asked whether or not they believed the IPO was a good investment based on the data that they were provided. All of the data was the same, only the gender of the executives involved in the company issuing the IPO was different.

The results showed that IPOs where the major executives were men were four times as likely to be recommended for investment than identical IPOs where the key figures in the enterprise were identified as women.

Students were also asked for their recommendation on what the price per share should be for the IPO. The initial share price was, on average, 11 percent higher for companies led by men compared to identical companies with identical financials that were led by women.

About 20 percent of the MBA students participating in the study were women.