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Effort provision in entrepreneurial teams - effects of team size, free-riding and peer pressure


Backes-Gellner, Uschi; Werner, Arndt; Mohnen, Alwine (2015). Effort provision in entrepreneurial teams - effects of team size, free-riding and peer pressure. Journal of Business Economics / Zeitschrift für Betriebswirtschaft, 85(3):205-230.

Abstract

This paper analyzes whether effort provision in entrepreneurial teams depends on the size of the team, assuming that size determines the strength of free-riding and peer pressure effects in entrepreneurial teams. We provide a theoretical model and empirical analyses to explain the joint effect of free-riding and peer pressure on effort in start-up teams. We begin with an economic model by Kandel and Lazear in J Polit Econ 100(4):801–817, (1992) and enrich it using insights from entrepreneurship research. Based on our model, we first hypothesize that with increasing team size in entrepreneurial teams, the efforts of the individual team founders should follow an inverted U-shaped pattern. Second, we argue that the peer pressure effect is stronger if team members have stronger social ties, and thus we expect the effort-maximizing team size to be larger in teams with stronger social ties. Using a data set from 214 German start-up teams, we find that our hypotheses are supported by the data.

This paper analyzes whether effort provision in entrepreneurial teams depends on the size of the team, assuming that size determines the strength of free-riding and peer pressure effects in entrepreneurial teams. We provide a theoretical model and empirical analyses to explain the joint effect of free-riding and peer pressure on effort in start-up teams. We begin with an economic model by Kandel and Lazear in J Polit Econ 100(4):801–817, (1992) and enrich it using insights from entrepreneurship research. Based on our model, we first hypothesize that with increasing team size in entrepreneurial teams, the efforts of the individual team founders should follow an inverted U-shaped pattern. Second, we argue that the peer pressure effect is stronger if team members have stronger social ties, and thus we expect the effort-maximizing team size to be larger in teams with stronger social ties. Using a data set from 214 German start-up teams, we find that our hypotheses are supported by the data.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2015
Deposited On:23 Dec 2014 19:19
Last Modified:05 Apr 2016 18:37
Publisher:Springer
ISSN:0044-2372
Publisher DOI:https://doi.org/10.1007/s11573-014-0749-x
Other Identification Number:merlin-id:10318

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