Publications
Publications
- 2008
- HBS Working Paper Series
Positions of Power and Status: Reciprocity in the Venture Capital Industry
By: Mikolaj J. Piskorski
Abstract
This paper proposes a straightforward way of differentiating between central network positions that confer power and those that confer status. I argue that actors achieve high status by receiving numerous exchanges from actors who in turn receive numerous exchanges from others. In contrast, power is obtained by engaging in exchanges with numerous alternative exchange partners, whose exchange opportunities are limited. These distinctions yield powerful insights into dynamics and consequences of power and status. Specifically, I show that possession of status brings higher benefits than possession of power. However, status puts greater constraints on mobility than power does, as it is harder for a high status actor than for a high power actor to acquire the high power, high status position. Empirical test in the American VC industry confirms these dynamics.
Keywords
Venture Capital; Partners and Partnerships; Power and Influence; Social and Collaborative Networks; Status and Position; Financial Services Industry; United States
Citation
Piskorski, Mikolaj J. "Positions of Power and Status: Reciprocity in the Venture Capital Industry." Harvard Business School Working Paper, No. 08-068, February 2008.