The Impact of Group Diversity on Performance and Knowledge Spillover -- an Experiment in a College Classroom

45 Pages Posted: 20 Jul 2006 Last revised: 26 Dec 2022

See all articles by Zeynep K. Hansen

Zeynep K. Hansen

Washington University in St. Louis - John M. Olin Business School; National Bureau of Economic Research (NBER)

Hideo Owan

University of Tokyo

Jie Pan

affiliation not provided to SSRN

Date Written: May 2006

Abstract

An important yet under-explored question in the teamwork literature concerns how group characteristics affect productivity. Within a given teamwork setting, it is not obvious how group member diversity affects the performance of the individual and the group. The group may gain from knowledge transfer and sharing while it may be crippled by communication and coordination problems that are prevalent in heterogeneous groups. In this study, we combine class performance data from an undergraduate management class with students' personal records to explore diversity and knowledge spillover effects. A major advantage of our dataset is the exogenous assignment of groups, which rules out the troublesome yet common self-selection issue in team literature. Our results indicate that male-dominant groups performed worse both in group work and in individually taken exams than female-dominant and equally-mixed gender groups after controlling for other group characteristics. Individual members from a group with more diversity in age and gender scored higher in exams. However, we did not find any significance of a group's racial composition over group and individual performances. Another novel aspect of this natural experiment is that each group chooses their own group contract form - members of "autonomous" groups receive equal grade for their group work while those in "democratic" groups can adopt differentiated point allocation, thus, providing a proper mechanism to punish free riders. Our estimation results show a significant correlation between the choice of a democratic contract and the group and individual performance. To address the endogeneity problem in groups' contract choices, we use a maximum likelihood treatment effect model and found that the democratic group contract has a positive and significant effect on group performance.

Suggested Citation

Hansen, Zeynep Kocabiyik and Owan, Hideo and Pan, Jie, The Impact of Group Diversity on Performance and Knowledge Spillover -- an Experiment in a College Classroom (May 2006). NBER Working Paper No. w12251, Available at SSRN: https://ssrn.com/abstract=903889

Zeynep Kocabiyik Hansen (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Hideo Owan

University of Tokyo ( email )

Hongo 7-3-1
Tokyo, TOKYO 113-0033
Japan

Jie Pan

affiliation not provided to SSRN