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Homophily in Entrepreneurial Team Formation

Author

Listed:
  • Paul A. Gompers

    (Harvard Business School, Finance Unit)

  • Kevin Huang

    (Harvard Business School)

  • Sophie Q. Wang

    (Harvard University)

Abstract

We study the role of homophily in group formation. Using a unique dataset of MBA students, we observe homophily in ethnicity and gender increases the probability of forming teams by 25%. Homophily in education and past working experience increases the probability of forming teams by 17% and 11 % respectively. Homophily in education and working experience is stronger among males than females. Further, we examine the causal impact of homophily on team performance. Homophily in ethnicity increases team performance by lifting teams in bottom quantiles to median performance quantiles, but it does not increase the chance of being top performers. Our findings have implications for understanding the lack of diversity in entrepreneurship and venture capital industry.

Suggested Citation

  • Paul A. Gompers & Kevin Huang & Sophie Q. Wang, 2017. "Homophily in Entrepreneurial Team Formation," Harvard Business School Working Papers 17-104, Harvard Business School.
    • Handle: RePEc:hbs:wpaper:17-104
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    Cited by:

    1. McGuinness, Paul B. & Vieito, João Paulo & Wang, Mingzhu, 2024. "The impact of CSR-engagement, board gender, and stock price synchronicity on female analyst stock coverage decisions," Journal of Financial Stability, Elsevier, vol. 75(C).
    2. Ramy Elitzur & Ilanit Gavious & Orit Milo, 2024. "Diversity in National Culture and Financial Harvest Exit Strategy in New Technology Ventures," Entrepreneurship Theory and Practice, , vol. 48(3), pages 881-908, May.
    3. Zuckerman, David, 2024. "Multidimensional homophily," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 486-513.
    4. Celina Högn & Lea Mayer & Johannes Rincke & Erwin Winkler, 2025. "Preferences for Gender Diversity in High-Profile Jobs," CESifo Working Paper Series 11732, CESifo.

    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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