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Team Heterogeneity in Startups and its Development over Time

Author

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  • Ulrich Kaiser

    () (Department of Business Administration, University of Zurich)

  • Bettina Müller

    () (Centre for European Economic Research, Dept. of Industrial Economics and International Management, Mannheim)

Abstract

We investigate the workforce heterogeneity of startups with respect to ed- ucation, age and wages. Our explorative study uses data on the population of 1,614 Danish firms founded in 1998. We track these firms until 2001 which enables us to analyze changes in workforce composition over time. Such a dynamic analysis constitutes a hitherto neglected area of entrepreneurship re- search. To assess relative workforce heterogeneity, we construct a simulated benchmark to which we compare observed workforce heterogeneity. We find that the initial workforce is relatively homogeneous compared to our bench- mark. Our result holds both for non-knowledge-based and, to a lesser extent, knowledge-based startups. This seems surprising since a vast management literature advocates heterogeneous teams. The difficulties associated with workforce heterogeneity (like affective confl ict or coordination cost) as well as "homophily" (peoples inclination to bound with others with similar char- acteristics) hence appear to generally overweigh the benefits of heterogeneity (like greater variety in perspectives or more creativity). We also document that workforces become more heterogeneous over time - startups add work- ers with skills di erent from the workforce at startup. The initial supposedly "poor" mix of workforce characteristics is hence adjusted as the startup ma- tures. This increase in workforce heterogeneity is, however, smaller compared to our benchmark but substantially larger than is team additions had the same characteristics as the initial team members.

Suggested Citation

  • 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).
    • Handle: RePEc:zrh:wpaper:337
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    Cited by:

    1. Brixy, Udo & Brunow, Stephan & D''Ambrosio, Anna, 2017. "Ethnic diversity in start-ups and its impact on innovation," IAB Discussion Paper 201725, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    labor Entrepreneurship; Startups; Skill Heterogeneity; Team Dynam- ics;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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