Young-Kyu Kim - The University of Chicago Booth School of Business

WORKING PAPERS – in preparation for submissionBrokerage as a Magnifying Glass: The effect of brokerage on status growthAbstract: This article explores the question of “what kind of social capital is optimal for growth in status.”This article starts with reviews of two divergent views on network property as a form of social capital: closurevs. brokerage. By considering interaction between structural holes and status, this article reconciles twodivergent views. Specifically, this article claims that brokerage has a positive effect on high-status firms butdoes not have a positive effect on low-status firms. In line with Burt’s “magnifying glass” metaphor, thisarticle predicts that the positive effect of brokerage will become greater as organizational status gets higher.The main proposition of this article is supported by empirical analysis on venture capital industry from 1975 to2003, using fixed-effect model as well as alternative model specification. The finding of this article has animplication on not only organizational sociology literature but also broad status attainment research.Specifically, as a strategic behavior to gain status, this article suggests that an actor should position in cohesivenetwork initially and that an actor should increase the level of brokerage as status grows.Primary Status, Complementary Status, and Capital Acquisition in the U.S. Venture Capital Industry(with Matthew S. Bothner and Wonjae Lee)Abstract: This article introduces a distinction between two kinds of status—primary status and complementarystatus. Using as our starting point the documented finding that status positively affects economic performance,we extend earlier work on status-based competition by exploiting the fact that producers simultaneouslyoccupy positions in multiple prestige-based hierarchies, in turn signaling their distinct abilities to performdifferent roles in the same market—namely, the roles of leader and follower, originator and complementor, starand supporter in the context of syndicate-like structures. In light of these distinct roles, we view primarystatus as an indicator of a producer’s quality as a leader and complementary status as an indicator of aproducer’s quality as a follower. Using a multi-year panel of data on the rate at which VC firms grow in thenumber of funds they raise, we find that primary and complementary status independently and positively affectfuture performance.How Does Status Affect Inertia? The Effects of Primary and Complementary Status onOrganizational Change (with Matthew S. Bothner and Wonjae Lee)Abstract: What is the effect of status on organizational inertia? Does greater status impede change? Or does itinstead make organizations more prone to shift their market positions? Two competing hypotheses find supportin the literature: (i) Higher status economic actors are thought to be decidedly less change-prone. According tothis view, status is an asset to be deliberately protected by staying in place, and occupancy of a privilegedlocation in a prestige ordering insulates from the competitive pressure that otherwise triggers structural andstrategic shifts. (ii) A second set of accounts underlies the equally plausible expectation that status amplifies agiven organization's propensity to reposition itself. Underpinning this alternative view are the possibilities thathigher status producers at once see more opportunities for change and can pursue them at lower cost than theirless-well-regarded counterparts. Which of these perspectives more accurately depicts organizational conduct?We address this question by elucidating and contrasting these opposing views before taking steps towardtheoretical resolution in multidimensional model of status. In particular, we introduce a distinction betweentwo kinds of status—primary status and complementary status—exploiting the fact that producerssimultaneously occupy positions in multiple prestige-based hierarchies, in turn signaling their distinct abilitiesto perform different roles in the same market—namely, the roles of leader and follower, originator andcomplementor, star and supporter in the context of syndicate-like structures. In light of these distinct roles, weview primary status as an indicator of a producer’s quality as a leader and complementary status as anindicator of a producer’s quality as a follower. Using a multi-year panel of data on the degree to which VCchange their investment strategies, we find that primary and complementary status differentially affectorganizational inertia. Complementary status renders firms more inert. And as long as complementary status ishigh, primary status positively affects strategic change.