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Two's Company: Human Capital Composition and Performance of Entrepreneurial Pairs

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  • Alex Coad
  • Bram Timmermans

Abstract

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 effects of team composition by distinguishing between the `primary' and the `secondary' founder. We complement existing work by showing that heterogeneity in team composition is affected 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.

Suggested Citation

  • Alex Coad & Bram Timmermans, 2012. "Two's Company: Human Capital Composition and Performance of Entrepreneurial Pairs," DRUID Working Papers 12-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    • Handle: RePEc:aal:abbswp:12-12
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ulrich Kaiser & Bettina Müller, 2013. "Team Heterogeneity in Startups and its Development over Time," Working Papers 337, University of Zurich, Department of Business Administration (IBW).
    2. Zunino, Diego & van Praag, Mirjam C. & Dushnitsky, Gary, 2017. "Badge of Honor or Scarlet Letter? Unpacking Investors' Judgment of Entrepreneurs' Past Failure," IZA Discussion Papers 11017, Institute of Labor Economics (IZA).
    3. Dahl, Michael S. & van Praag, Mirjam C. & Thompson, Peter, 2014. "Entrepreneurial Couples," IZA Discussion Papers 8186, Institute of Labor Economics (IZA).
    4. Tobias Kollmann & Christoph Stöckmann & Yvonne Meves & Julia M. Kensbock, 2017. "When members of entrepreneurial teams differ: linking diversity in individual-level entrepreneurial orientation to team performance," Small Business Economics, Springer, vol. 48(4), pages 843-859, April.
    5. Alex Coad & Sara Amoroso & Nicola Grassano, 2017. "Diversity in one dimension alongside greater similarity in others: evidence from FP7 cooperative research teams," The Journal of Technology Transfer, Springer, vol. 42(5), pages 1170-1183, October.
    6. Alex Coad, 2018. "Firm age: a survey," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 13-43, January.
    7. Alex Coad & Kristian Nielsen & Bram Timmermans, 2017. "My first employee: an empirical investigation," Small Business Economics, Springer, vol. 48(1), pages 25-45, January.
    8. Praag, Mirjam van & Zunino, Diego & Dushnitsky, Gary, 2017. "Badge of Honor or Scarlet Letter? Unpacking Investors’ Judgment of Entrepreneurs’ Past Failure," CEPR Discussion Papers 12329, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Diversity; Entrepreneurial Teams; Survival; Growth; Team Composition;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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