Many published papers in the management field have used statistical methods that, according to the latest insights in econometrics, can lead to elevated rates of false positives: results that appear “significant,” whereas they are not. The question is how problematic these less robust econometric analyses are in practice for management research. This paper presents simulations and an empirical replication to investigate two widespread but now largely discredited practices in panel data analysis: nonclustered standard errors and random effects (RE). The simulations indicate that these two practices can lead to strongly elevated rates of false positives in typical empirical settings studied in management research. The often-advocated Hausman test does not always prevent false positives in RE regressions. Replication of a published regression that used RE and classic standard errors yields that many of the coefficients reported as significant in the original analysis become insignificant when using fixed effects and clustered standard errors, on a slightly different sample. Based on the findings in this paper, published results using nonclustered standard errors or RE estimates for panel data should be interpreted with great care, because the probability that they are false positives can be much larger than reported. Going forward, empirical researchers should cluster standard errors to account for serial correlation and use fixed rather than random effects to account for unobserved heterogeneity. Funding: X. Li received financial support from the Ian Potter ’93D PhD Award. Supplemental Material: The online appendix is available at https://doi.org/10.1287/stsc.2022.0172 .
根据计量经济学的最新见解，管理领域的许多已发表论文都使用了统计方法，这些方法可能导致误报率升高:结果看起来“显著”，但实际上并非如此。问题是，在管理研究的实践中，这些不那么稳健的计量经济学分析有多大问题。本文提出了模拟和经验复制，以调查面板数据分析中两种广泛但现在基本上不可信的做法:非聚类标准误差和随机效应(RE)。模拟表明，在管理研究中研究的典型经验设置中，这两种做法可能导致误报率大幅上升。经常提倡的Hausman检验并不总能防止RE回归中的假阳性。使用正则化和经典标准误差的已发表回归的复制结果表明，当在稍微不同的样本上使用固定效应和聚类标准误差时，许多在原始分析中报告为显著的系数变得不显著。根据本文的发现，使用非聚类标准误差或对面板数据进行RE估计的已发表结果应该非常小心地解释，因为它们是假阳性的概率可能比报告的要大得多。展望未来，实证研究人员应该聚类标准误差来解释序列相关性，并使用固定效应而不是随机效应来解释未观察到的异质性。基金资助:李x获得Ian Potter ' 93D博士奖资助。补充材料:在线附录可在https://doi.org/10.1287/stsc.2022.0172上获得。
{"title":"Broken Effects? How to Reduce False Positives in Panel Regressions","authors":"Xina Li, Phebo D. Wibbens","doi":"10.1287/stsc.2022.0172","DOIUrl":"https://doi.org/10.1287/stsc.2022.0172","url":null,"abstract":"Many published papers in the management field have used statistical methods that, according to the latest insights in econometrics, can lead to elevated rates of false positives: results that appear “significant,” whereas they are not. The question is how problematic these less robust econometric analyses are in practice for management research. This paper presents simulations and an empirical replication to investigate two widespread but now largely discredited practices in panel data analysis: nonclustered standard errors and random effects (RE). The simulations indicate that these two practices can lead to strongly elevated rates of false positives in typical empirical settings studied in management research. The often-advocated Hausman test does not always prevent false positives in RE regressions. Replication of a published regression that used RE and classic standard errors yields that many of the coefficients reported as significant in the original analysis become insignificant when using fixed effects and clustered standard errors, on a slightly different sample. Based on the findings in this paper, published results using nonclustered standard errors or RE estimates for panel data should be interpreted with great care, because the probability that they are false positives can be much larger than reported. Going forward, empirical researchers should cluster standard errors to account for serial correlation and use fixed rather than random effects to account for unobserved heterogeneity. Funding: X. Li received financial support from the Ian Potter ’93D PhD Award. Supplemental Material: The online appendix is available at https://doi.org/10.1287/stsc.2022.0172 .","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":"309 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135907375","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The new stakeholder theory (NST) grapples with two canonical questions: Which stakeholders are enfranchised in organizations? How is the value created through stakeholder collaboration distributed and experienced by stakeholders? This paper first describes how the NST builds on original stakeholder theory to ask these two specific questions. The defining features of the NST are (i) a broad range of dependent variables, (ii) descriptiveness, (iii) formalized analysis, (iv) boundaries on stakeholder enfranchisement, and (v) analytic links to other established theories. The paper then assesses the assumptions and implications of this theory for understanding organizational purpose. A primary idea is that the NST conceptualizes purpose as originating in the goals, needs, and interests of stakeholders as complex, nuanced actors. Under the NST, the organization is conceived of as a tool—a functionalized construction—through which enfranchised stakeholders pursue a shared purpose that leads to experiences of stakeholder value in terms that are defined by the relevant stakeholders themselves. The survival and profitability of an organization depends on its effectiveness and efficiency as a tool for accomplishing mutual stakeholder aims, which are what define organizational purpose. Funding: Funded by Social Sciences and Research Council of Canada.
{"title":"The New Stakeholder Theory on Organizational Purpose","authors":"A. McGahan","doi":"10.1287/stsc.2023.0184","DOIUrl":"https://doi.org/10.1287/stsc.2023.0184","url":null,"abstract":"The new stakeholder theory (NST) grapples with two canonical questions: Which stakeholders are enfranchised in organizations? How is the value created through stakeholder collaboration distributed and experienced by stakeholders? This paper first describes how the NST builds on original stakeholder theory to ask these two specific questions. The defining features of the NST are (i) a broad range of dependent variables, (ii) descriptiveness, (iii) formalized analysis, (iv) boundaries on stakeholder enfranchisement, and (v) analytic links to other established theories. The paper then assesses the assumptions and implications of this theory for understanding organizational purpose. A primary idea is that the NST conceptualizes purpose as originating in the goals, needs, and interests of stakeholders as complex, nuanced actors. Under the NST, the organization is conceived of as a tool—a functionalized construction—through which enfranchised stakeholders pursue a shared purpose that leads to experiences of stakeholder value in terms that are defined by the relevant stakeholders themselves. The survival and profitability of an organization depends on its effectiveness and efficiency as a tool for accomplishing mutual stakeholder aims, which are what define organizational purpose. Funding: Funded by Social Sciences and Research Council of Canada.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44275771","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Corporations are currently confronting major, interlocking crises, including climate change, biodiversity loss, inequalities, and social isolation. When under threat, executives tend to focus inward and on the short term. This is particularly unfortunate because it is in such crises that executives need to see beyond the here and now in order to ride the storms. In this paper, we argue that corporate purpose helps organizations fight such myopia and offer four mechanisms through which this works: exposing new insights, seeing issues holistically, helping to sustain focus, and bringing unity and direction. Funding: The authors acknowledge the generous funding from the Social Sciences and Humanities Council of Canada [Grant 895-2015-0026] that contributed to the broader project in which these ideas were generated.
{"title":"Seeing Beyond the Here and Now: How Corporate Purpose Combats Corporate Myopia","authors":"Ju Young Lee, P. Bansal, Alice Mascena Barbosa","doi":"10.1287/stsc.2023.0183","DOIUrl":"https://doi.org/10.1287/stsc.2023.0183","url":null,"abstract":"Corporations are currently confronting major, interlocking crises, including climate change, biodiversity loss, inequalities, and social isolation. When under threat, executives tend to focus inward and on the short term. This is particularly unfortunate because it is in such crises that executives need to see beyond the here and now in order to ride the storms. In this paper, we argue that corporate purpose helps organizations fight such myopia and offer four mechanisms through which this works: exposing new insights, seeing issues holistically, helping to sustain focus, and bringing unity and direction. Funding: The authors acknowledge the generous funding from the Social Sciences and Humanities Council of Canada [Grant 895-2015-0026] that contributed to the broader project in which these ideas were generated.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48736113","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Corporate purpose is receiving an extraordinary amount of attention from both scholars and practitioners. But do existing theories of management help us to understand this unexpected development? This study represents an effort to understand purpose better. I characterize inside-out and outside-in perspectives on purpose as distinct but connected phenomena related to different research traditions. Inside-out purpose is a channeling of the passion and commitment employees feel toward fulfilling stakeholder needs; outside-in purpose is society and external stakeholders urgently calling on the organization to live up to its responsibilities. I devote special attention to theories that best explain the present moment’s unique awareness of corporate purpose. Among them is the work of Philip Selznick, emphasizing values, and the literature on the new institutionalism and institutional logics. I conclude with a section on how leaders can leverage the benefits of both perspectives while mitigating their risks. I also make recommendations for future research. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose. Funding: This work benefited from funding from the Social Trends Institute and the Juan Antonio Perez Lopez Chair at IESE Business School.
{"title":"Inside-out and Outside-in Perspectives on Corporate Purpose","authors":"J. Almandoz","doi":"10.1287/stsc.2023.0180","DOIUrl":"https://doi.org/10.1287/stsc.2023.0180","url":null,"abstract":"Corporate purpose is receiving an extraordinary amount of attention from both scholars and practitioners. But do existing theories of management help us to understand this unexpected development? This study represents an effort to understand purpose better. I characterize inside-out and outside-in perspectives on purpose as distinct but connected phenomena related to different research traditions. Inside-out purpose is a channeling of the passion and commitment employees feel toward fulfilling stakeholder needs; outside-in purpose is society and external stakeholders urgently calling on the organization to live up to its responsibilities. I devote special attention to theories that best explain the present moment’s unique awareness of corporate purpose. Among them is the work of Philip Selznick, emphasizing values, and the literature on the new institutionalism and institutional logics. I conclude with a section on how leaders can leverage the benefits of both perspectives while mitigating their risks. I also make recommendations for future research. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose. Funding: This work benefited from funding from the Social Trends Institute and the Juan Antonio Perez Lopez Chair at IESE Business School.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46674173","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper reflects on the burgeoning yet fragmented research on corporate purpose. Drawing on three actual situations I experienced, I point to three challenges of purpose research that require our scholarly attention to produce research relevant for practice: purpose justification, implementation, and evaluation.
{"title":"From the Boardroom: Making Purpose Research Relevant for Practice","authors":"Rodolphe Durand","doi":"10.1287/stsc.2023.0182","DOIUrl":"https://doi.org/10.1287/stsc.2023.0182","url":null,"abstract":"This paper reflects on the burgeoning yet fragmented research on corporate purpose. Drawing on three actual situations I experienced, I point to three challenges of purpose research that require our scholarly attention to produce research relevant for practice: purpose justification, implementation, and evaluation.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47844846","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An outstanding question in research on competitive strategy is what determines the strength and type of strategic response that incumbents deploy against new entrants. We argue that strategists’ assessment of threat from new entrants and their choice of strategic reactions depend on the shared identity schema in their field. Position of new entrants across identity categories indicate whether they pose a competitive threat within the same identity-based niche or outside it and whether they threaten to erode the incumbent’s category’s social value relative to other categories. Potential reactions to these threats can also be classified according to whether they protect or enhance the value that incumbents create and capture through their membership in their identity category. Matching identity-relevant strategic actions to the type of threat that new entries pose, we argue that incumbents (1) employ identity-deepening tactics in response to competition in their identity-based niche; (2) use identity-extending tactics in response to competition outside their niche; (3) respond to categorical identity threats by affirming their identities; and (4) are less likely to respond to either competitive or identity threats that originate from new entrants that do not clearly fit in the shared identity schema. We find support for our predictions in analyses using data on the population of Turkish universities over a 30-year period. We discuss theoretical implications for ecological and socio-cognitive studies of markets and practical implications for predicting patterns of strategic interaction and disruptive potential of new entrants. Supplemental Material: The e-companion is available at https://doi.org/10.1287/stsc.2022.0179 .
{"title":"Shared Identity Schemas Shape Incumbent Responses to New Entrants","authors":"Özgecan Koçak, Başak Topaler","doi":"10.1287/stsc.2022.0179","DOIUrl":"https://doi.org/10.1287/stsc.2022.0179","url":null,"abstract":"An outstanding question in research on competitive strategy is what determines the strength and type of strategic response that incumbents deploy against new entrants. We argue that strategists’ assessment of threat from new entrants and their choice of strategic reactions depend on the shared identity schema in their field. Position of new entrants across identity categories indicate whether they pose a competitive threat within the same identity-based niche or outside it and whether they threaten to erode the incumbent’s category’s social value relative to other categories. Potential reactions to these threats can also be classified according to whether they protect or enhance the value that incumbents create and capture through their membership in their identity category. Matching identity-relevant strategic actions to the type of threat that new entries pose, we argue that incumbents (1) employ identity-deepening tactics in response to competition in their identity-based niche; (2) use identity-extending tactics in response to competition outside their niche; (3) respond to categorical identity threats by affirming their identities; and (4) are less likely to respond to either competitive or identity threats that originate from new entrants that do not clearly fit in the shared identity schema. We find support for our predictions in analyses using data on the population of Turkish universities over a 30-year period. We discuss theoretical implications for ecological and socio-cognitive studies of markets and practical implications for predicting patterns of strategic interaction and disruptive potential of new entrants. Supplemental Material: The e-companion is available at https://doi.org/10.1287/stsc.2022.0179 .","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":"1 1","pages":""},"PeriodicalIF":3.9,"publicationDate":"2022-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41948203","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Backward compatibility is a governance strategy that can be adopted by platform owners to build indirect network effects and encourage owners of older compatible software to update to newer hardware models. Previous research shows backward compatibility has a positive effect on hardware sales. However, there is limited evidence concerning the other associated costs and benefits. In particular, there is a lack of evidence on the effect of backward compatibility on software sales despite its importance in understanding the full range of possible network and sales displacement effects associated with the strategy. Using weekly software-level sales data from the U.S. video gaming industry, we find that backward-compatible hardware associates with increased sales of software released for the previous hardware generation. However, we find that the introduction of backward compatibility may not increase the sales of new hardware if the feature is not available immediately at launch. Further, we show that the increased sales of software for the old hardware platform may cannibalize software sales for the new platform. Overall, our results suggest that backward compatibility is time-sensitive and involves several important trade-offs. We, therefore, conclude that the use of backward compatibility needs to be carefully considered by platform owners prior to implementation.
{"title":"Don’t Look Back? Backward Compatibility in the Video Gaming Industry","authors":"J. Cox, Paul Crosby, J. McKenzie","doi":"10.1287/stsc.2022.0177","DOIUrl":"https://doi.org/10.1287/stsc.2022.0177","url":null,"abstract":"Backward compatibility is a governance strategy that can be adopted by platform owners to build indirect network effects and encourage owners of older compatible software to update to newer hardware models. Previous research shows backward compatibility has a positive effect on hardware sales. However, there is limited evidence concerning the other associated costs and benefits. In particular, there is a lack of evidence on the effect of backward compatibility on software sales despite its importance in understanding the full range of possible network and sales displacement effects associated with the strategy. Using weekly software-level sales data from the U.S. video gaming industry, we find that backward-compatible hardware associates with increased sales of software released for the previous hardware generation. However, we find that the introduction of backward compatibility may not increase the sales of new hardware if the feature is not available immediately at launch. Further, we show that the increased sales of software for the old hardware platform may cannibalize software sales for the new platform. Overall, our results suggest that backward compatibility is time-sensitive and involves several important trade-offs. We, therefore, conclude that the use of backward compatibility needs to be carefully considered by platform owners prior to implementation.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2022-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42839528","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Extant scholarship typically assumes that VC firms prefer to pick winners. I offer an alternative perspective: that specialist VC firms can select less attractive start-ups—with innovative potential but in need of help—and then contribute to the start-ups’ innovative processes so they can achieve their potential. The analogy is buying a fixer-upper house, which, with the right help, can be brought to the level of one that is move-in ready. I argue that specialist (versus generalist) VC firms in the syndicate have superior commercialization knowledge and specialized resource networks, and they can choose to follow a move-in-ready strategy (select winners) or a fixer-upper strategy (build winners). This choice is contingent on the research environment and how unique the help from the specialist VC firm is: in well-developed research environments, a specialist adds less value and may follow a move-in-ready strategy; in less-developed research environments, a specialist adds more value and may follow a fixer-upper strategy. I leverage an ideal empirical context, global biotechnology VC-backed start-ups, over the period 1996–2006, when the biotech industry was established in the United States and developing in 25 other countries, and highlight qualitative insights from 20 interviews with investors in seven countries.
{"title":"Move-in Ready or Fixer-Upper? VC Specialization and Start-up Innovation","authors":"Elisa Alvarez-Garrido","doi":"10.1287/stsc.2022.0176","DOIUrl":"https://doi.org/10.1287/stsc.2022.0176","url":null,"abstract":"Extant scholarship typically assumes that VC firms prefer to pick winners. I offer an alternative perspective: that specialist VC firms can select less attractive start-ups—with innovative potential but in need of help—and then contribute to the start-ups’ innovative processes so they can achieve their potential. The analogy is buying a fixer-upper house, which, with the right help, can be brought to the level of one that is move-in ready. I argue that specialist (versus generalist) VC firms in the syndicate have superior commercialization knowledge and specialized resource networks, and they can choose to follow a move-in-ready strategy (select winners) or a fixer-upper strategy (build winners). This choice is contingent on the research environment and how unique the help from the specialist VC firm is: in well-developed research environments, a specialist adds less value and may follow a move-in-ready strategy; in less-developed research environments, a specialist adds more value and may follow a fixer-upper strategy. I leverage an ideal empirical context, global biotechnology VC-backed start-ups, over the period 1996–2006, when the biotech industry was established in the United States and developing in 25 other countries, and highlight qualitative insights from 20 interviews with investors in seven countries.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2022-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44668793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An important consequence of an alliance is that partnering firms combine their reputations by associating them to jointly implemented projects. However, an often-overlooked aspect is that those reputations may themselves change due to both the announcement of the firms’ decision to form the alliance and the performance of joint projects. We develop a formal model that provides an integrated perspective of these reputational effects, while allowing us to isolate and characterize each of them. We find that the way in which the firms’ competence levels affect their decision to form an alliance determines how the firms’ reputations evolve following the announcement of the alliance and the performance of joint projects. This indicates that the analysis of the reputational effects of an alliance requires understanding the firms’ alliance formation decision in the first place. We show, for instance, that a firm’s reputation may decrease following the decision to form an alliance, and that the impact of project performance on the reputations of alliance partners can be very asymmetric. Among other things, our analysis implies that a firm’s desirability as an alliance partner does not necessarily increase with its reputation and level of competence.
{"title":"Disentangling Reputational Effects in Alliances","authors":"A. A. Costa, Luís Almeida Costa, Luís Vasconcelos","doi":"10.1287/stsc.2022.0175","DOIUrl":"https://doi.org/10.1287/stsc.2022.0175","url":null,"abstract":"An important consequence of an alliance is that partnering firms combine their reputations by associating them to jointly implemented projects. However, an often-overlooked aspect is that those reputations may themselves change due to both the announcement of the firms’ decision to form the alliance and the performance of joint projects. We develop a formal model that provides an integrated perspective of these reputational effects, while allowing us to isolate and characterize each of them. We find that the way in which the firms’ competence levels affect their decision to form an alliance determines how the firms’ reputations evolve following the announcement of the alliance and the performance of joint projects. This indicates that the analysis of the reputational effects of an alliance requires understanding the firms’ alliance formation decision in the first place. We show, for instance, that a firm’s reputation may decrease following the decision to form an alliance, and that the impact of project performance on the reputations of alliance partners can be very asymmetric. Among other things, our analysis implies that a firm’s desirability as an alliance partner does not necessarily increase with its reputation and level of competence.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2022-09-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44923174","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the gender gap in entrepreneurship in the technology industry. Digitization has created vast economic opportunities in the technology sector and has lowered many barriers to entry, thus reducing traditional frictions regarding entrepreneurship and potentially increasing opportunities for female founders. However, anecdotal evidence has suggested that female technology founders are rare and that women are underrepresented in science, technology, engineering, and mathematics roles. Based on individual career histories collected from more than 42 million U.S.-based LinkedIn profiles, including more than 1.3 million founders, we explore whether there are higher rates of female founders in technology companies relative to other industries. Our analysis revealed the following: (1) Females were only half as likely as males to found businesses in the technology industry. (2) Females were less likely to found successive businesses (i.e., serial founders), which was even more pronounced in the technology industry. (3) When we used the gender gap in labor force participation as a baseline, the gender gap in technology entrepreneurship was particularly large, even compared with other male-dominated industries (e.g., construction). (4) The gender gap in technology entrepreneurship was driven by lower rates of entrepreneurship by females in lower positions in the organizational hierarchy. In contrast, females who reached the C-suite in technology sectors were 16% more likely to found firms compared with their female C-suite counterparts in nontechnology industries. Combined, the results provide a nuanced view of the gender gap in entrepreneurship.
{"title":"Population-Level Evidence of the Gender Gap in Technology Entrepreneurship","authors":"M. Miric, Pai-Ling Yin, Daniel C. Fehder","doi":"10.1287/stsc.2022.0170","DOIUrl":"https://doi.org/10.1287/stsc.2022.0170","url":null,"abstract":"This study investigates the gender gap in entrepreneurship in the technology industry. Digitization has created vast economic opportunities in the technology sector and has lowered many barriers to entry, thus reducing traditional frictions regarding entrepreneurship and potentially increasing opportunities for female founders. However, anecdotal evidence has suggested that female technology founders are rare and that women are underrepresented in science, technology, engineering, and mathematics roles. Based on individual career histories collected from more than 42 million U.S.-based LinkedIn profiles, including more than 1.3 million founders, we explore whether there are higher rates of female founders in technology companies relative to other industries. Our analysis revealed the following: (1) Females were only half as likely as males to found businesses in the technology industry. (2) Females were less likely to found successive businesses (i.e., serial founders), which was even more pronounced in the technology industry. (3) When we used the gender gap in labor force participation as a baseline, the gender gap in technology entrepreneurship was particularly large, even compared with other male-dominated industries (e.g., construction). (4) The gender gap in technology entrepreneurship was driven by lower rates of entrepreneurship by females in lower positions in the organizational hierarchy. In contrast, females who reached the C-suite in technology sectors were 16% more likely to found firms compared with their female C-suite counterparts in nontechnology industries. Combined, the results provide a nuanced view of the gender gap in entrepreneurship.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2022-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49243478","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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