Structural Role Complementarity in Entrepreneurial Teams

Abstract

To refine the understanding of the social network characteristics of entrepreneurial teams, we present a new construct: structural role complementarity. In particular, we examine the variation between team members’ respective abilities to act as network brokers. Based on the cofounding networks of 9,461 entrepreneurs and 2,446 large-scale industrial enterprises over 45 years in Russia’s emerging economy (1869–1913), our findings show that variation among team members’ brokering ability significantly predicts the starting capital raised by their firm. The effect is moderated by the team’s average brokering potential. When both the team’s average and variation in brokering potential is high, firms raise greater starting capital. By using multiple membership models, we demonstrate that greater starting capital is largely attributable to team factors rather than the attributes of the individual team members. We also take advantage of discriminatory laws that were passed in 1887 in an instrumental variable analysis to address potential endogeneity issues. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2874 . This paper was accepted by Olav Sorenson, organizations.