The cost of friendship

• 成果类型: Article
• 署名作者: Gompers, Paul A.; Mukharlyamov, Vladimir; Xuan, Yuhai
• 署名单位: Harvard University; National Bureau of Economic Research; Harvard University; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.01.013
• 发表日期: 2016
• 页码: 626-644
• 关键词: venture capital; syndication; Homophily

摘要

We investigate how personal characteristics affect people's desire to collaborate and whether this attraction enhances or detracts from performance in venture capital. We find that venture capitalists who share the same ethnic, educational, or career background are more likely to syndicate with each other. This homophily reduces the probability of investment success, and the detrimental effect is most prominent for early-stage investments. A variety of tests show that the cost of affinity is most likely attributable to poor decision making by high-affinity syndicates after the investment is made. These results suggest that birds-of-a-feather-flock-together effects in collaboration can be costly. (C) 2016 Elsevier B.V. All rights reserved.