Two's Company: Human Capital Composition and Performance of Entrepreneurial Pairs
45 Pages Posted: 2 Nov 2012
Date Written: October 31, 2012
We study the effects of diverse team composition on the survival and growth of new ventures using the Danish Linked Employer-Employee database. To get cleaner measures of diverse team composition, we focus on entrepreneurial dyads, and also investigate the asymmetric eects of team composition by distinguishing between the 'primary' and the 'secondary' founder. We complement existing work by showing that heterogeneity in team composition is aected by the asymmetric hierarchical structure within the team, and that a unidimensional diversity indicator (which is usually applied) fails to capture a number of performance effects of heterogeneous team composition. Ventures with a STEM-educated primary founder and a Business-educated secondary founder have high employment growth, while the opposite combination (Business first, STEM second) has low employment growth. Pairs of younger individuals have lower survival chances but higher employment growth. Family firms have lower employment growth, especially when formed with your mother.
Keywords: Diversity, Entrepreneurial Teams, Survival, Growth, Team Composition
JEL Classification: L25, L26, J21
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