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Birds of a feather get lost together: new venture team composition and performance

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  • Paul Steffens
  • Siri Terjesen
  • Per Davidsson

Abstract

This study explores the relationship between new venture team composition and new venture persistence and performance over time. We examine the team characteristics of a 5-year panel study of 202 new venture teams and new venture performance. Our study makes two contributions. First, we extend earlier research concerning homophily theories of the prevalence of homogeneous teams. Using structural event analysis we demonstrate that team members’ start-up experience is important in this context. Second, we attempt to reconcile conflicting evidence concerning the influence of team homogeneity on performance by considering the element of time. We hypothesize that higher team homogeneity is positively related to short term outcomes, but is less effective in the longer term. Our results confirm a difference over time. We find that more homogeneous teams are less likely to be higher performing in the long term. However, we find no relationship between team homogeneity and short-term performance outcomes. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Paul Steffens & Siri Terjesen & Per Davidsson, 2012. "Birds of a feather get lost together: new venture team composition and performance," Small Business Economics, Springer, vol. 39(3), pages 727-743, October.
    • Handle: RePEc:kap:sbusec:v:39:y:2012:i:3:p:727-743
    DOI: 10.1007/s11187-011-9358-z
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    More about this item

    Keywords

    New venture teams; Homophily; Team homogeneity; Team heterogeneity; Team diversity; New venture performance; L26; M12;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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