Journal of Business Economics

, Volume 85, Issue 3, pp 205–230 | Cite as

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

  • Uschi Backes-Gellner
  • Arndt Werner
  • Alwine Mohnen
Original Paper

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.

Keywords

Peer pressure Free-riding Entrepreneurial teams Team size 

JEL Classification

M13 M59 L26 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  • Uschi Backes-Gellner
    • 1
  • Arndt Werner
    • 2
  • Alwine Mohnen
    • 3
  1. 1.University of ZurichZurichSwitzerland
  2. 2.Institute for Small and Medium Size Enterprises (IfM Bonn)BonnGermany
  3. 3.TUM School of ManagementMunichGermany

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