Prior social ties and the limits of peer effects on startup team performance’

Forthcoming in Strategic Management Journal

(with Rembrand Koning)

We conduct a field experiment at an entrepreneurship bootcamp to investigate whether interaction with proximate peers shapes a nascent startup team’s performance. We find that teams whose members lack prior ties to others at the bootcamp experience peer effects that influence the quality of their product prototypes. A one-standard-deviation increase in the performance of proximate teams is related to a two-thirds standard-deviation improvement for a focal team. In contrast, we find that teams whose members have many prior ties interact less frequently with proximate peers, and thus their performance is unaffected by nearby teams. Our findings highlight how prior social connections, which are often a source of knowledge and influence, can limit new interactions and thus the ability of organizations to leverage peer effects to improve the performance of their members.

Digitization and Divergence: School Ratings and Segregation in America

Working Paper (November, 2018)

(with Anuj Kumar)

We analyze whether widespread online access to school quality information affected economic and social segregation in America. We leverage the staged roll-out of GreatSchools.org school ratings across America from 2006-2015 to answer this question. Across a range of outcomes and specifications, we find that the mass availability of school ratings has accelerated divergence in housing values, income distributions, education levels, as well as the racial and ethnic composition across communities. Affluent and more educated families were better positioned to leverage this new information to capture educational opportunities in communities with the best schools. An unintended consequence of better information was less, rather than more, equity in education.

Conversations and idea generation: Evidence from a field experiment

Forthcoming in Research Policy

(with Rembrand Koning)

When do conversations lead people to generate better ideas? We conducted a field experiment at a startup bootcamp to evaluate the impact of informal conversations on the quality of product ideas generated by participants. Specifically, we examine how the personality of an innovator (openness to experience, capturing creativity) and the personalities of her randomly assigned conversational peers (extroversion, measuring willingness to share information) affects the innovator’s ideas. We find that open innovators who spoke with extroverted peers generated significantly better ideas than others at the bootcamp. However, closed individuals produced mediocre ideas regardless with who they spoke, suggesting limited benefits of conversations for these people. More surprisingly, open individuals, who are believed to be inherently creative, produced worse ideas after they spoke with introverted peers, suggesting individual creativity’s dependence on external information. Our study demonstrates the importance of considering the traits of both innovators and their conversational peers in predicting who will generate the best ideas.

Helpful thirds and the durability of collaborative ties

Working Paper

(with Sampsa Samila and Alexander Oettl)

We explore whether helpful behavior makes collaborative networks more resilient to decay. Using a novel research design, we study whether research collaborations among 11,000 pairs of research immunologists persists after the unexpected loss of a third collaborator. We find that dyads whose departed third collaborator was helpful—as indicated by acknowledgments in journal articles—continue to collaborate after the death of their third. In contrast, dyads who lost a non-helpful third experienced a 5-12%-point decline in their probability of repeat collaboration. The effect of third-party helpfulness was particularly strong when they were high status and when the treated dyad did not have a prior history of helpful behavior. Our results speak to the central role that helpfulness plays in shaping the collaborative relationships that underpin science and innovation.

When does advice impact startup performance?

Strategic Management Journal, 40(3), 331-356

(with Aaron Chatterji, Solene Delecourt and Rembrand Koning)

Why do some entrepreneurs thrive while others fail? We explore whether the advice entrepreneurs receive about managing their employees influences their startup’s performance. We conducted a randomized field experiment in India with 100 high-growth technology firms whose founders received in-person advice from other entrepreneurs who varied in their managerial style. We find that entrepreneurs who received advice from peers with a formal approach to managing people—instituting regular meetings, setting goals consistently, and providing frequent feedback to employees—grew 28% larger and were 10 percentage points less likely to fail than those who got advice from peers with an informal approach to managing people, two years after our intervention. Entrepreneurs with MBAs or accelerator experience did not respond to this intervention, suggesting that formal training can limit the spread of peer advice.

Social networks and careers

Social_Networks_and_Careers“, Forthcoming in Social Networks at Work, D.J. Brass and S.P. Borgatti (eds.) S.I.O.P. Frontiers Book Series.

Social networks affect a range of career outcomes including job search, promotion and wage determination. Networks also affect major career transitions, including entry into entrepreneurship and exit into retirement. Across a range of studies, individuals are found to use their networks to deal with two perennial problems they face in labor markets and organizations: the scarcity of information and the absence of trust. I review the literature with an eye towards understanding which features of a person’s networks help them solve these problems at different career stages. I conclude by considering how the rising importance of information technology will affect the networks-career link moving forward.

Peers and network growth: Evidence from a natural experiment

Management Science61(10), 2536-2547.

(with Surendrakumar Bagde)

Much research suggests that social networks affect individual and organizational success. However, a strong assumption underlying this research is that network structure is not reducible to the individual attributes of social actors. In this article, we test this assumption by examining whether interacting with random peers causes exogenous growth of a person’s network. Using three years of network data for students at an Indian college, we evaluate the effect of peers on network growth. We find strong evidence that interacting with random, but well-connected, roommates causes significant growth of a focal student’s network. Further, we find that this growth also implies an increase in how close an actor moves to a network’s center and whether that actor is likely to serve as a network bridge. Fundamentally, our results demonstrate that exogenous factors beyond individual agency—i.e., random peers—can shape network structure. Our results also provide a useful model for causally identifying the determinants of network structure and dynamics.