2017
Working Paper
HBS Working Paper Series

Homophily in Entrepreneurial Team Formation

By: Paul A. Gompers, Kevin Huang and Sophie Q. Wang

Format:Print
| Language:English
| Pages:53

Abstract

We study the role of homophily in group formation. Using a unique dataset of MBA students, we observe homophily in ethnicity and gender increases the probability of forming teams by 25%. Homophily in education and past working experience increases the probability of forming teams by 17% and 11 % respectively. Homophily in education and working experience is stronger among males than females. Further, we examine the causal impact of homophily on team performance. Homophily in ethnicity increases team performance by lifting teams in bottom quantiles to median performance quantiles, but it does not increase the chance of being top performers. Our findings have implications for understanding the lack of diversity in entrepreneurship and the venture capital industry.

Keywords

Groups and Teams; Diversity; Familiarity; Entrepreneurship; Venture Capital; Performance

Citation

Gompers, Paul A., Kevin Huang, and Sophie Q. Wang. "Homophily in Entrepreneurial Team Formation." Harvard Business School Working Paper, No. 17-104, May 2017.