Venture Capital and the Effects of Gender Diversity in New Venture Board Interlocks
Type
journal article
Date Issued
2019
Author(s)
Abstract
The venture capital (VC) setting has long been questioned for its discrimination and tendency to promote men before women. Do those who go against the dominant behavior and take women on new venture boards face costs that could be avoided otherwise? To investigate this issue, we draw on social categorization theory and use a population of VC-financed new ventures. Our study confirms that adding women to new venture boards decreases new venture performance due to discrimination associated with women’s board engagement in board interlock networks. Moreover, while the ability to bridge structural holes in interlock networks has benefits, such as power and control over in-group resources, we argue and show that becoming too central in an interlock network has negative effects on performance due to redundancies and cognitive lock-ins. In extending our theory development to the interaction effect of these two negative effects, we propose there is hope for women who are active in the VC scene. We show that increasing gender diversity within focal boards helps overcome the downsides of high interlock network centrality. We discuss implications for board gender diversity, social categorization theory, and board interlock networks.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
Global Center for Entrepreneurship + Innovation
Refereed
No
Publisher
Academy of Management Proceedings 2019 2019:1
Subject(s)
Eprints ID
258048
File(s)![Thumbnail Image]()
restricted
Name
Hess et al 2019 AOM Proceedings.pdf
Size
125.17 KB
Format
Adobe PDF
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