Entrepreneurs (Co-) Working in Close Proximity: Impacts on Technology Adoption and Startup Performance Outcomes

Maria P. Roche; Alexander  Oettl; Christian  Catalini

Working Paper | HBS Working Paper Series | 2020

Entrepreneurs (Co-) Working in Close Proximity: Impacts on Technology Adoption and Startup Performance Outcomes

by Maria P. Roche, Alexander Oettl and Christian Catalini

Abstract

Entrepreneurs learn from a variety of sources. One particularly important channel is learning from fellow entrepreneurs. In this paper, we examine the influence of physical proximity on technology adoption decisions and subsequent startup performance outcomes at one of the largest technology co-working hubs in the United States. To deal with endogenous geographic clustering, we rely on the random assignment of office space to the hub's 251 startups. Using floor plans to measure geographic distances, we find that proximity greatly influences the likelihood of adopting an upstream technology also used by a peer firm. This effect quickly decays with distance where startups that are more than 20 meters apart no longer influence each other. Our results suggest that other social, informational, and competition-based dimensions alter the effect of distance and that peer interaction is a viable mechanism driving our results.

Keywords: coworking; proximity; knowledge flows;

Language: English

Format: Print

50 pages

Citation:

Roche, Maria P., Alexander Oettl, and Christian Catalini. "Entrepreneurs (Co-) Working in Close Proximity: Impacts on Technology Adoption and Startup Performance Outcomes." Harvard Business School Working Paper, No. 21-024, May 2020.

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Entrepreneurs (Co-) Working in Close Proximity: Impacts on Technology Adoption and Startup Performance Outcomes

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