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  • 2008
  • Working Paper
  • HBS Working Paper Series

The Strength of Peripheral Ties: Maintaining Status When Firms Lose Resources

By: Mikolaj J. Piskorski and Bharat N. Anand
  • Format:Print
  • | Language:English
  • | Pages:43
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Abstract

This paper examines conditions under which high-status firms can retain their positions, even if they lose resources. Firms are considered high status when they obtain ties from other high-status firms. Among high-status firms, we distinguish between those that also receive ties from peripheral low status firms and those that do not. Though the peripheral ties contribute little to firms' 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 with peripheral ties will retain their status, but those without such ties will lose it. Results of an empirical examination of venture capital syndicate formation in the United States support for these predictions.

Keywords

Venture Capital; Resource Allocation; Rank and Position; Status and Position; Financial Services Industry; United States

Citation

Piskorski, Mikolaj J., and Bharat N. Anand. "The Strength of Peripheral Ties: Maintaining Status When Firms Lose Resources." Harvard Business School Working Paper, No. 08-067, February 2008.

About The Author

Bharat N. Anand

Strategy
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