Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary This paper studies the role of diversity and performance in the entrepreneurial teams. A brief description of the project's goals and its current state Abstract <p>This paper studies the role of diversity and performance in the entrepreneurial teams. They exploit a unique dataset of MBA students who participated in a required course to propose and start a real microbusiness that allows them to examine horizontal diversity (i.e., within the team) as well as vertical diversity (i.e., team to faculty advisor) and their effect on performance. The design of the course allows for identification of the causal implications of horizontal and vertical diversity. The course was run in multiple cohorts in otherwise identical formats except for the team formation mechanism used. In several cohorts, students were allowed to choose their teams from among students in their section (roughly 90 students). In other cohorts, students were randomly assigned to teams based upon a computer algorithm. In the cohorts that were allowed to choose, the research finds strong selection based upon shared attributes. Among the randomly-assigned teams, greater diversity along the intersection of gender and race/ethnicity significantly reduced performance.</p> <div> </div> The full abstract of the study, if available Links https://dx.doi.org/10.2139/ssrn.3908020 Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Does homophily affect entrepreneurial team formation and performance? Sample Trial population and sample selection First-year MBA students in a top business school. Most students have worked in finance or consulting prior to business school and over 30% of them worked in venture capital or technology related areas after graduation, representing a sizable labor inflow to the entrepreneurial ecosystem. Participants are ethnically diverse and 40% are women. Number of treatment groups Size of treatment groups Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description Throughout a mandatory course, students are required to design and launch a real micro-business in teams of five to seven people. Teams composition is randomized, which allows for exogenous variation in how diverse the members are in terms of gender, ethnicity, education, and work experience. Teams are supervised by a section leader, who is also responsible for teaching the material of the entrepreneurship course. This results in some participants having a same-gender mentor while others having a mentor from the opposite gender. Students present their projects to faculty members and to a panel of judges from the relevant industry, who rank all the projects based on teams’ performance and the quality of the idea. Rounds of data collection Baseline data collection and method Data collection method and data collected Evaluation Outcome variables <p>Team outcomes: whether the project could proceed to IPO day, if it could yield positive cash flows in the following 5 years, relative ranking in their section and in the whole calss. <br /> </p> Results <p>Team performance is negatively affected by higher ethnic diversity across members, with this effect being driven by the intersection of ethnicity and gender. The effect vanishes when individuals are in gender and ethnic diverse groups by choice. Reducing educational background diversity also increases team performance, while no effects are found for gender and industry diversity when assessed unidimensionally. Women perform better when they are assigned a women section leader.</p> Intervention costs Not available. Cost benefit ratio Reference Calder-Wang, Sophie and Gompers, Paul A. and Huang, Kanyuan, Diversity and Performance in Entrepreneurial Teams, 2021. Jacobs Levy Equity Management Center for Quantitative Financial Research Paper Citation for use in academic references
