Other Unpublished Work | 2011

Deference from Low-status Firms: Maintaining Status without Resources

by Mikolaj Jan Piskorski and Bharat N. Anand


This paper proposes a set of conditions under which high-status firms retain their positions, even if they lose resources. Firms are considered high status if they obtain ties from other high-status firms. Within the class of high-status firms, we distinguish between those that receive ties only from high-status firms and those that also receive ties from low-status firms. Although ties from low-status firms contribute little to a firm's status, we hypothesize that they play a critical role in maintaining it in the event of resource loss. Specifically, following resource loss, high-status firms without ties from low-status firms will lose their status, but those with ties from low-status firms will retain it. Results of an empirical examination of venture capital syndicate formation in the United States yield support for these predictions.

Keywords: Business Ventures; Venture Capital; Financial Condition; Alliances; Rank and Position; Status and Position; Financial Services Industry; United States;


Piskorski, Mikolaj Jan, and Bharat N. Anand. "Deference from Low-status Firms: Maintaining Status without Resources." 2011.