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    Entrepreneurs (Co-) Working in Close Proximity: Impacts on Technology Adoption and Startup Performance Outcomes
    07 Sep 2020Working Paper Summaries

    Entrepreneurs (Co-) Working in Close Proximity: Impacts on Technology Adoption and Startup Performance Outcomes

    by Maria P. Roche, Alexander Oettl, and Christian Catalini
    In one of the largest entrepreneurial co-working spaces in the United States, startups are influenced by peer startups within a distance of 20 meters. The associated advantages for learning and innovation could be lost using at-a-distance work arrangements.
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    Author Abstract

    Entrepreneurs learn from a variety of sources. One particularly important channel is learning from fellow entrepreneurs. In this paper, we examine the influence of physical proximity on technology adoption decisions and subsequent startup performance outcomes at one of the largest technology co-working hubs in the United States. To deal with endogenous geographic clustering, we rely on the random assignment of office space to the hub's 251 startups. Using floor plans to measure geographic distances, we find that proximity greatly influences the likelihood of adopting an upstream technology also used by a peer firm. This effect quickly decays with distance where startups that are more than 20 meters apart no longer influence each other. Our results suggest that other social, informational, and competition-based dimensions alter the effect of distance and that peer interaction is a viable mechanism driving our results.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: August 2020
    • HBS Working Paper Number: HBS Working Paper #21-024
    • Faculty Unit(s): Strategy
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