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Choosing your side-kick: Team diversity in pulled and pushed entrepreneurship
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Economics.
2016 (English)Conference paper, Published paper (Other academic)
Abstract [en]

Studies of entrepreneurship have demonstrated that the composition of the founding teamplays a central role in determining the fate of new ventures. This paper discusses the foundingteam formation process. Specifically, tendencies to homophily in the formation of entrepreneurialteams, in terms of demographic and professional attributes, are studied througha comparisson of which types of co-workers that engage in firm formation together underpulled and pushed entrepreneurship. Facing a general displacement because of firm closure,the number of possible team formation outcomes increases compared to the situation of pulledentrepreneurship. The difference in diversity between pulled and pushed teams may thereforebe interpreted as reflecting the difference between team formation choices under greater orsmaller constraints. Relying on Swedish employer-employee matched data covering the creationof new ventures during the period 2001-2011, the analyses reveal weaker homophily infounding teams launching a new venture under pushed circumstances (displacement after employer’sshut down), in particular as regards demographic attributes. These results suggest thatteam diversity is inhibited by the homophily-induced limitation of founders’ personal networks,rather than by active preferences for homophily in the team formation process.

Place, publisher, year, edition, pages
2016.
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:kth:diva-238613OAI: oai:DiVA.org:kth-238613DiVA, id: diva2:1260905
Conference
DRUID, Copenhagen, 2016
Note

QC 20181106

Available from: 2018-11-05 Created: 2018-11-05 Last updated: 2018-11-06Bibliographically approved
In thesis
1. In Search for Greener Grass: Employee Mobility, Self-employment and Career Choices in the Wake of Consolidation
Open this publication in new window or tab >>In Search for Greener Grass: Employee Mobility, Self-employment and Career Choices in the Wake of Consolidation
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

In this environment of increasingly knowledge intensive economy, individuals with their embedded skills and knowledge are the main source of value for an organization. Both employers andemployees have strong reasons to consider the causes and consequences of job mobility. Suchconsiderations are accentuated in the context of an organizational change such as that broughtabout during mergers and acquisitions (M&As). This argumentation determines the startingpoint for the thesis. This dissertation explores employee mobility, the formed alliances and theirlabor market evaluation post M&As and firm closure.

The first paper investigates the increased employee mobility and the generated spin-outs postM&As. By distinguishing the pushed from the pulled forces, the results suggest that employeesare indeed pushed into self-employment after an M&A. Yet this force only partially explains themobility of employees and the generation of opportunities in association with M&As insinuatesthe presence of a pulled force. One of the contributions of this paper is the conceptualization ofthe push force through quantitative measures.

The second paper originates from the same argument as the previous paper. Employees arenot only the carrier of knowledge but they also determine the culture and the more informalvalues of the firms.It is argued that the detention of top-managers post-M&As facilitates theintegration and is critical for the transition of knowledge. Despite the provided evidences, thereis still a surprisingly high top manager turnover post-M&A. in this paper we argue that oneof the underlying motives for this turn-over is the structure of the top-management team pre-M&As. Our empirical analyses provides support for our hypotheses suggesting that a higherlevel of diversity in top-management teams pre-M&As increases the propensity of top-managerturn-over post-M&As.

In paper three, the teams are put in focus. As the composition of the founding team innew ventures determines the venture’s future performance and potential growth, it is relevant toexamine the factors shaping the structure of these teams. This paper empirically examines thedifference in the intensity of diversity in founders teams when formed under pushed and pulledcircumstances. The outcomes suggest that these teams are in general dominated by homogeneity.However, under pushed circumstances (lay-off post firm shutdowns), the heterogeneity increases.These results indicate that the general tendency to homogeneity of founding teams is related tothe restriction imposed by the individuals network rather than the result of their preferences forhomogeneous teams.

Finally the last paper studies the labor market evaluation of the studied employee mobil-ity and self-employment. Matching methods and treatment effects are applied to compare thefuture wages of employees with a temporary detour in self-employment after dismissal. As self-employment is in general a temporary employment and the experience is of short spell, it is im-portant to examine the outcome of such practice. In this paper we reveal a small wage premiumfor individuals with a detour into self-employment compared to those who stay in conventionalemployment.

The empirical work of the thesis is built on quantitative analyses and econometric regressionsapplied on extensive databases from Statistics Sweden.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2018
Series
TRITA-ITM-AVL ; 2018:55
Keywords
Mergers and acquisitions; Employee mobility; Entrepreneurship; Self-employment; Teams; Managers; Homophily; Labor market
National Category
Economics Business Administration
Research subject
Economics; Industrial Economics and Management
Identifiers
urn:nbn:se:kth:diva-238637 (URN)978-91-7873-040-7 (ISBN)
Public defence
2018-11-30, Salongen, Osquars backe 31, KTHB, våningsplan2, KTH, Stockholm, 10:00 (English)
Opponent
Supervisors
Available from: 2018-11-06 Created: 2018-11-06 Last updated: 2018-11-06Bibliographically approved

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