Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2021
  • Working Paper

Diversity and Performance in Entrepreneurial Teams

By: Sophie Calder-Wang, Paul A. Gompers and Kevin Huang
  • Format:Print
  • | Language:English
ShareBar

Abstract

We study the role of diversity and performance in the entrepreneurial teams. We exploit a unique dataset of MBA students who participated in a required course to propose and start a real micro-business that allows us 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, we find strong selection based upon shared attributes. Among the randomly-assigned teams, greater diversity along the intersection of gender and race/ethnicity significantly reduced performance. However, the negative effect of this diversity is alleviated in cohorts in which teams are endogenously formed. Finally, we find that teams with more female members perform substantially better when their faculty section leader was also female. Because the gender of the faculty section leader is exogenous to the gender make-up of the entrepreneurial team, the positive performance effects can be interpreted as causal. These findings suggest that diversity policies should take adequate consideration of the multiple dimensions of diversity.

Keywords

Entrepreneurship; Groups and Teams; Diversity; Performance

Citation

Calder-Wang, Sophie, Paul A. Gompers, and Kevin Huang. "Diversity and Performance in Entrepreneurial Teams." NBER Working Paper Series, No. 28684, April 2021.
  • Find it at Harvard
  • Read Now

About The Author

Paul A. Gompers

Finance
→More Publications

More from the Authors

    • 2023
    • Faculty Research

    The Market for CEOs: Evidence from Private Equity

    By: Paul A. Gompers, Steven N. Kaplan and Vladimir Mukharlyamov
    • 2022
    • Faculty Research

    Private Equity

    By: Paul A. Gompers and Steven N. Kaplan
    • 2022
    • Faculty Research

    Failing Just Fine: Assessing Careers of Venture Capital-backed Entrepreneurs via a Non-wage Measure

    By: Natee Amornsiripanitch, Paul Gompers, George Hu, Will Levinson and Vladimir Mukharlyamov
More from the Authors
  • The Market for CEOs: Evidence from Private Equity By: Paul A. Gompers, Steven N. Kaplan and Vladimir Mukharlyamov
  • Private Equity By: Paul A. Gompers and Steven N. Kaplan
  • Failing Just Fine: Assessing Careers of Venture Capital-backed Entrepreneurs via a Non-wage Measure By: Natee Amornsiripanitch, Paul Gompers, George Hu, Will Levinson and Vladimir Mukharlyamov
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College