Attention, Please! Outside Expertise and Entrepreneurial Success

46 Pages Posted: 20 Sep 2021

See all articles by Alexander Montag

Alexander Montag

University of Warwick; Research Institute of Industrial Economics (IFN)

Date Written: September 2021


I examine whether and how outside expertise of directors matters for start-up companies. I exploit the fact that some directors sit on multiple boards simultaneously and study the effects of director attention on a focal company’s performance and growth. Identification comes from leveraging distraction events at directors’ other companies that plausibly shock their attention. I find that an increase in a company's fraction of directors who are distracted leads to a decline in return on assets (ROA) and sales growth, especially if distracted directors are more experienced. Effect sizes represent 8% and 13% of the sample median of ROA and sales growth, which is larger than what prior literature has documented for public companies.

Keywords: Entrepreneurship, human capital, start-up success, board of directors

JEL Classification: L26, J24, G34

Suggested Citation

Montag, Alexander, Attention, Please! Outside Expertise and Entrepreneurial Success (September 2021). Available at SSRN: or

Alexander Montag (Contact Author)

University of Warwick

Coventry, CV4 7AL
United Kingdom

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15

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