Employees in small, young firms have roughly 15% higher rates of divorce
Couples with job alignment have lower divorce hazards
Additional alignment advantage for couples with startup jobs
Startups and divorce
Young ventures (small young and large young firm types) function as hotbeds of divorce
with Michael S. Dahl and Olav Sorenson
We argue for an organizational perspective on the relationship between professional and personal lives, proposing in particular that more stable organizations, those characterized by higher levels of bureaucracy, engender lower levels of marital instability among their employees. Consistent with this expectation, we find that startup employees have higher divorce rates compared to the employees of more established organizations. These results hold even when estimated using instrumental variables to account for selection into startup employment. But couple matching also matters. Couples in which both individuals work for startups – even if different ones – have some of the lowest levels of divorce.
Read the working paper (09/2019 version) here. For a more recent version, please get in touch.
Divorce and its economic ramifications
with Ingo Kleindienst, Kaleb Abreha, Denis Schweizer, and Juliane Proelss
Most CEOs, like any of us, experience divorce as painful. But can their business feel the pain too? We investigated whether the divorce of CEOs leaves a mark on their company's operating performance. We used Danmarks Statistik data between 2000-2012 to find pairs of CEOs, who are remarkably similar to each other not just in their personal characteristics such as age, sex, wage, marital tenure, but also in terms of how their companies are doing, such as industry, size, sales, total assets, and historical performance. Once we created two groups that are on similar trajectories, we used a difference in differences research design. This technique ensured that any difference between the firms’ operating profitability is due to the only difference between them: whether their CEOs had a divorce. The findings reveal that companies with divorcing CEOs significantly underperform their non-divorce-matched counterparts. Over the period starting at the year of the divorce until two years after, their return on assets declines on average about 1.3 to 1.9 percentage points.
For the latest version of the manuscript, get in touch.
CEO divorce lowers firm performance
Network tension as conjuncture of dyadic collaborations
Link between network tension and six measures of innovative performance
Network tension and innovation in teams
Network tension predicts creative team success more so than brokerage
with Balázs Vedres
Innovative teams face the paradox of relying on experience to generate novelty. We argue that network tension – the lack of closure with strong ties – helps teams to recognize and implement successful novel combinations, more so than brokerage, and closed ties. Prior scholarship has neglected the creative potential of open and strong relationships because it assumed that strong ties are always closed, and only weak ties bridge diverse structural locations. We develop two, graph level measures of tension: the relative frequency and strength of strong, open triads. Using data on the entire history of recorded jazz, with 175 064 sessions from more than a century, we show that network tension is more prevalent than expected under a configuration model. While tension is a predictor of several success measures, including deep success, brokerage and closure are not. We also measure the structural availability of tension to each session using computational methods and show that unexpected tension has an additional contribution to deep success. We discuss implications for project teams and organizations where innovation is crucial.
Read the working paper (03/2021 version) on SocArXiv.
Who distributes craft beer?
Wholesalers able to leverage positional strategies locally and overcome relationship lock-in
with Ingo Kleindienst
We identify which specific types of wholesalers were distributing products from an increasingly important niche segment of the beer industry, namely craft beer. As traditional recommendations of the strategy literature disregard lock-ins from previous market ties are present, we introduce the notion of social buffering to indicate the embeddedness of organizations into their history of cumulative relationships. We use longitudinal data on distributor establishments and their local portfolio composition between 1997–2016 from three different U.S. states. Our results reveal that it is distributors that are able both to leverage positional strategies in their local portfolios and free themselves from the lock-in associated with their historically beneficial social and market relationships with the large brewers who distribute craft.
Read the working paper (06/2019 version) on SSRN or SocArXiv. For a more recent version, please get in touch.
Craft in distributor portfolios
Crashing the momentum
Change in the social logic of market relationships
Multiunit new entrant survival advantage, conditioned on the competitive landscape
Survival among U.S. beer wholesalers
When Liability Becomes Potential
This paper focuses on an intermediary market segment and examines what happens to incumbents and entrants when there is a surge in the number of potential downstream partners. While focusing on two structural constraints, organizational structure and competitive pressure, I build off of the fact that in the past thirty years in the U.S. beer industry, as the number of beer producers (i.e. brewers) proliferated, their intermediaries (i.e. wholesalers) declined. I examine the effect of this evolutionary dynamic and the inter-organizational relationship-level mechanism it induces on the variation in survival chances of different forms of establishments in the wholesaling industry. I use restricted-access economic microdata from the Longitudinal Business Database (1983-2013). I find that multi-unit entrants have better survival chances than industry incumbents, an effect I term ‘the potential of newness’. Furthermore, I show that survival benefits especially accrue to these newcomers in areas with competition-laden history and where the industry experiences shakeouts. I explain this counterintuitive finding via a social mechanism: in dynamic market contexts, it is easier to create entirely new market ties than change old, socially embedded ones.
The spatial factor in craft brewer firm strategies
"The Beer We Brew": how the competitive landscape influences firms' product strategy
with Paul-Brian McInerney
This paper looks at heterogeneity in colocation patterns for distinct classes of organizations within the same industry. We find three distinct classes of craft breweries using latent class analysis: established, up-and-coming and innovator. Members of the innovator class tend to locate in dense markets near established organizations while up-and-coming firms use the strategies developed by the established class but in new geographic locales. We theorize that these patterns are a case of partitioning within the partition: innovators locate near established firms in order to serve consumers with sophisticated or adventurous palates who are not being serviced by the established craft brewers.