Jason Greenberg

Activist Choice Homophily and the Crowdfunding of Female Founders

In this paper, we examine when members of underrepresented groups choose to support each other, using the context of the funding of female founders via donation-based crowdfunding. Building on theories of choice homophily, we develop the concept of activist choice homophily, in which the basis of attraction between two individuals is not merely similarity between them, but rather perceptions of shared structural barriers stemming from a common social identity based on group membership. We differentiate activist choice homophily from homophily based on the similarity between individuals (“interpersonal choice homophily”), as well as from “induced homophily,” which reflects the likelihood that those in a particular social category will affiliate and form networks. Using lab experiments and field data, we show that activist choice homophily provides an explanation for why women are more likely to succeed at crowdfunding than men and why women are most successful in industries in which they are least represented.

A Matter of (Relational) Style: Loan Officer Consistency and Exchange Continuity in Microfinance

Social scientists have long considered what mechanisms underlie repeated exchange. Three mechanisms have garnered the majority of this attention: formal contracts, relational contracts, and relationally embedded social ties. Although each mechanism has its virtues, all three exhibit a common limitation: an inability to fully explain the continuation and stability of intertemporal exchange between individuals and organizations in the face of change. Drawing on extensive quantitative data on approximately 450,000 microfinance loans made by a microfinance institution in Mexico from 2004 to 2008 that include random assignment of loan officers, this research proposes the concept of ”relational styles” to help explain how repeated exchange is possible in the face of personnel change. We define relational styles as systematically reoccurring patterns of interaction employed by social actors within and across exchange relationships—in this paper, between microfinance clients and loan officers. We show that relational styles that are consistent facilitate a clear understanding of expectations and thus exchange. We also demonstrate that consistency in the relational styles followed by successive loan officers mitigates the negative impact of a broken loan officer–client tie. This paper thus proposes and empirically tests a social mechanism based on relational styles that often accompanies relational embeddedness, but which may also serve as a partial substitute for it. This paper was accepted by Jesper Sorensen, organizations.

What You Value or What You Know? Which Mechanism Explains the Intergenerational Transmission of Business Ownership Expectations?

Research has consistently shown that the children of business owners are more likely to become business owners themselves. What mechanism underlies this intergenerational correlation is still not clear. This research assesses the importance of several mechanisms proposed to drive the children of business owners to expect to become business owners using data from the 1988-1992 NELS. Results are inconsistent with arguments asserting that the children of business owners expect to become business owners because of: the transmission of human capital or financial capital; the expectation of inheriting a business; a heightened awareness of the viability of business ownership; or preferences for having lots of money, leisure time, being successful in work, or finding steady employment. Findings are consistent with the notion that the intergenerational correlation in business ownership is a result of shared preferences and/or traits, and this effect is particularly strong when accompanied by awareness of paternal business ownership. These results remain after accounting for alternative interpretations and model specifications. Finally, model and variable specification make endogeneity unlikely.

What's the Value of Social Capital? A Within-Person Job Attributes, Offer and Choice Test

Whether and how social capital derived through social ties creates value has animated substantial research in management, sociology, economics, and political science. Scholars are now generally inclined to believe that social ties have an impact on labor market outcomes — that is, it is “who you know” that counts. Two mechanisms were initially identified to explain why this is the case: access to a better distribution of offers in terms of pay or non-redundant information that facilitates job offer. The evidence informing each theory, however, was often inconsistent and circumstantial. In this research we propose and test a unified model of these two theoretical approaches. We do so leveraging unique data on contemporaneous job search with detailed information about job search channels and offer characteristics in alternative-specific job attributes and choice models. We find that contrary to conventional wisdom, search through social networks typically results in job offers with lower total compensation (e.g., -18.0% for those derived through referrals from family and friends v. formal recruiting, -15.4% for those derived via alumni referrals). However, offers derived through weak bridging ties such as alumni contacts are more likely to be accepted because they are perceived as having better growth prospects, and students are willing to accept a significant total compensation discount to accept offers derived via school faculty and students they did not know prior to matriculation because they afford access to industries that are otherwise difficult to access. On balance, our tests are consistent with Granovetter’s argument that the value networks afford is information about opportunities that are otherwise difficult to access rather than a better distribution of offers in terms of pay.