Pavel Ivanov Zhelyazkov

Interactions and Interests: Collaboration Outcomes, Competitive Concerns, and the Limits to Triadic Closure

Organizational theorists have extensively documented the increased likelihood that two organizations will form a relationship if they have preexisting relationships with the same third party, a phenomenon known as triadic closure. They have neglected, however, the importance of the shared third party in facilitating or reversing this process. I theorize that the collaboration outcomes and competitive concerns of the intermediary spanning an open triad play a crucial role in whether that triad closes. Using a longitudinal dataset of the investment decisions of limited partners investing in U.S. venture capital firms in the period 1997–2007, I find that an intermediary is less likely to facilitate a direct connection under two conditions: (1) the intermediary has experienced failed collaborations with one of the indirectly connected parties or (2) the intermediary has competitive concerns—driven by its replaceability and relative attractiveness—that it may lose future business to one of the indirectly connected parties. The paper goes beyond the conceptualization of indirect ties as passive scaffolding that supports creating direct ties and instills a greater appreciation for the role of the intermediary that sits across them.

The Many Faces of Status: Audience Segmentation and Competing Effects on Pricing

Different research traditions have proposed three distinct mechanisms in explaining the influence of status of a market intermediary on price formation – certification, Matthew effect and cognitive authority – though there has been little prior effort to disentangle those mechanisms conceptually or empirically. Focusing on the relationship between lead underwriter status and U.S. equity IPO underpricing, the present study argues that these mechanisms have countervailing effects operating via different audiences – respectively the buyers (institutional and retail investors), the intermediary’s peers (other investment banks) and the sellers (issuers). We then empirically identify these effects using directed acyclic graphs (DAG) reasoning and structural equation modeling of the U.S. equity IPOs from 1986 to 2010. Our key contribution is integrating the various status-related mechanisms into a single framework, and in the process resolving long-standing mixed results of financial economists about the relatio...

When Does the Glue of Social Ties Dissolve

Prior research has highlighted the importance of prior ties in ensuring the stability of interorganizational collaborations, but has provided little understanding of how the ongoing performance cues – affecting the parties’ expectations of the ultimate pay-off – may enhance or weaken its effects. I distinguish between general performance cues caused by general environmental shocks and specific cues caused by collaboration-idiosyncratic shocks, and argue that the effect of social ties will be strongest when the general cues are negative but the specific cues are positive. An analysis of the withdrawal behavior of Venture Capital firms from investment syndicates over 25 years yields results consistent with those arguments: the negative effect of prior syndication ties on propensity to stop investing in ongoing syndicates is strengthened by poor market valuation of the industry of the portfolio company, but weakened by a down-round for the portfolio company. The study has implications for the literatures on ...