Top Managers in Entrepreneurial Firms: Who Is Running the Show?

47 Pages Posted: 24 Aug 2019

See all articles by Elena Kulchina

Elena Kulchina

North Carolina State University; Duke University; Duke Innovation & Entrepreneurship Initiative

Ana Venâncio

ISEG Lisbon School of Economics and Management,Universidade de Lisboa

Date Written: August 23, 2019

Abstract

New venture teams have a strong impact on firm performance, and researchers have long been interested in understanding how entrepreneurs select co-founders and early employees. In this paper, we examine how entrepreneurs choose top managers for their ventures. Founders often lack the necessary skills and motivation for managing their firms personally and hire professional managers instead. We find, however, that entrepreneurs have a strong tendency to hire managers who are similar to them, even when this may negatively affect firm performance. Our results are consistent with the idea that founders choose managers with similar demographic characteristics, such as age, nationality, and education, due to homophily. Yet they hire managers with similar industry experience because such similarity is good for the firm.

Keywords: top manager, entrepreneur, founding team

Suggested Citation

Kulchina, Elena and Venâncio, Ana, Top Managers in Entrepreneurial Firms: Who Is Running the Show? (August 23, 2019). Available at SSRN: https://ssrn.com/abstract=3441999 or http://dx.doi.org/10.2139/ssrn.3441999

Elena Kulchina (Contact Author)

North Carolina State University ( email )

Hillsborough Street
Raleigh, NC 27695
United States

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Duke Innovation & Entrepreneurship Initiative

215 Morris St., Suite 300
Durham, NC 27701
United States

Ana Venâncio

ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

Rua do Quelhas 6
LISBOA, 1200-781
Portugal

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
18
Abstract Views
125
PlumX Metrics