Published papers

Solal, I. and Snellman, K. (2019) Women don’t mean business? Gender penalty in board composition. Organization Science.

Abstract: We examine investor responses to board diversity and highlight a previously unexplored mechanism to explain negative market reactions to senior female appointments. Drawing on signaling theory, we propose that an increase in board diversity leads investors to update their beliefs about firm preferences. Specifically, we argue that a gender-diverse board is interpreted as revealing a preference for diversity, and a weaker commitment to shareholder value. Consequently, firms with more female directors will be penalized. We test our argument using 14 years of panel data on U.S. public firms. We find that firms that increase board diversity suffer a decrease in market value, and that this effect is amplified for firms that have received higher ratings for their diversity practices across the organization. These results suggest that observers respond to the presence of female leaders not simply on their own merit, but as broader cues of firm preferences, and that firms may counteract any potential signaling effect through careful framing.

Selected media mentions: Forbes, Financial Times, Bloomberg

Apouey, B., Roulet, A., Solal, I., and Stabile, M. (2020) Gig workers during the COVID-19 crisis in France: Financial precarity and mental well-being. Journal of Urban Health.

Abstract: We set out to explore how precarious workers, particularly those employed in the gig economy, balance financial uncertainty, health risks, and mental well-being. We surveyed and interviewed precarious workers in France during the COVID-19 crisis, in March and April 2020. We oversampled gig economy workers, in particular in driving and food delivery occupations (hereafter drivers and bikers), residing in metropolitan areas. These workers cannot rely on stable incomes and are excluded from the labor protections offered to employees, features which have been exacerbated by the crisis. We analyzed outcomes for precarious workers during the mandatory lockdown in France as an extreme case to better understand how financial precarity relates to health risks and mental well-being. Our analysis revealed that 3 weeks into the lockdown, 56% of our overall sample had stopped working and respondents had experienced a 28% income drop on aerage. Gig economy drivers reported a significant 20 percentage point larger income decrease than other workers in our sample. Bikers were significantly more likely to have continued working outside the home during the lockdown. Yet our quantitative analysis also revealed that stress and anxiety levels were not higher for these groups and that bikers in fact reported significantly lower stress levels during the lockdown. While this positive association between being a biker and mental health may be interpreted in different ways, our qualitative data led to a nuanced understanding of the effect of gig work on mental well-being in this population group.

Selected working papers

Solal, I. The gender of money: Investor gender effects on early-stage venture financing. Available on SSRN. Runner-up for OMT Best Student Paper Award, 2019. (revise and resubmit).

Abstract: The search for answers to the chronic underrepresentation of women among funded entrepreneurs has highlighted the influence of entrepreneur gender on financing outcomes. Yet it is important to also consider the demographic makeup of the investor population. Using data on 652 businesses presented to 40 investors on the televised pitch competition series Shark Tank, I examine how investor gender impacts not only who receives an offer, but on what terms, and how that may shape the structure of the market for early-stage venture financing. Exploiting unique features of my setting to overcome the empirical challenges that normally hamper the investigation of gender effects on investor behavior, I find that both male and female investors are more likely to extend offers to entrepreneurs of the same gender. I also find that female investors offer terms more favorable to entrepreneurs, in an apparent attempt to attract more desirable investment opportunities, and that female entrepreneurs appear more responsive to this strategy. These factors combine to increase the likelihood that female founders will be funded by female investors, leading to gender segregation in the market for capital. Implications of the effect of numerical representation of women among investors are discussed.

Snellman, K.* and Solal, I.* Does investor gender matter for the success of female entrepreneurs? Gender homophily and the stigma of incompetence in entrepreneurial finance. Available on SSRN. (revise and resubmit)

Abstract: Female support of other women has been promoted as a potential remedy to the gender gap across many domains. Yet the potential costs associated with gender homophily remain understudied. We propose that homophily aggravates negative gender bias in evaluation. Focusing on venture-backed startups, we theorize that future investors will discount a female entrepreneur’s competence as the key factor in an early-stage investment decision, when the investment comes from a female investor. Consequently, female-backed female entrepreneurs may struggle to raise additional funds from new investors. In a field study of venture-backed startups, we find that firms with female founders who received funding from female rather than male VCs are two times less likely to raise additional financing. We find no equivalent investor gender effect for male-founded firms. In an experimental study, we find that pitches by female-backed female entrepreneurs receive lower evaluations compared to all other pitches, and that this is driven by perceptions of entrepreneur competence. Our findings suggest that well-intentioned calls for women to invest in women not only place an undue burden on female investors but may also undermine the long-term success of female entrepreneurs.

Hafenbrack, A., LaPalme, M., and Solal, I. Mindfulness meditation reduces guilt and prosocial reparation (revise and resubmit)

Abstract: The present research investigates whether and how mindfulness influences the guilt-driven tendency to repair harm caused to others. Through a series of eight experiments, we demonstrate that state mindfulness cultivated via focused breathing meditation can dampen the relationship between transgressions and the desire to engage in reparative prosocial behaviors. Experiment 1 showed that induced state mindfulness reduced state guilt. Experiments 2a-2c found that induced state mindfulness reduced the willingness to engage in reparative behaviors in normally guilt-inducing situations. Experiments 3a and 3b found that guilt mediated the negative effect of mindfulness meditation on prosocial reparation. Experiment 4 demonstrated that induced state mindfulness weakened the link between a transgression and reparative behavior, as well as documented the mediating role of guilt over and above other emotions. Finally, in Experiment 5, we found that loving kindness meditation led to significantly more reparation than focused breathing meditation, mediated by increased other-focus and feelings of love. We discuss theoretical and practical implications..

Snellman, K., Dahlander, L., Askin, N., and Solal, I. Collaboration experience predicts funding success for intellectually diverse teams

Abstract: Collaboration is increasingly the norm in scientific endeavors, with scholars hoping to harness creative potential by bringing together diverse perspectives. Yet, while the research published by teams that bridge different disciplines tends to be more highly cited, scholars who work in diverse teams are typically less productive. Using data on accepted and rejected grant applications submitted by 3,950 scientific teams from a major American research university, we show that intellectual diversity within the team is associated with a higher likelihood of a grant application being rejected. We also show that teams with prior collaboration experience can overcome this penalty and that, over time, persistence may increase the team’s chances of success. This suggests that collaboration in diverse teams is difficult and only experienced teams are able to capture the benefits of diversity.

Solal, I. and Snellman, K. The B-team: Team Prototypes and their Consequences for the Success of Gender-Diverse Teams in Academy of Management Proceedings 2020 (1) 21318

Abstract: Teams are increasingly encouraged to diversify by bringing in more women and members of underrepresented minorities. Yet studies on the relationship between performance and demographic diversity have yielded mixed findings, and diverse teams often struggle when competing for scarce resources. Extending insights from the professional prototypes literature to teams, we propose a theory to explain why gender-diverse teams may incur a selection penalty. We argue that when quality is uncertain and decision-makers are selecting on potential for exceptional performance, they are more likely to fall back on culturally dominant schemas or prototypes. Thus, when existing models of team success are overwhelmingly male, the presence of women on the team may make the team less successful, not because this drives down objective performance, but because the team is no longer perceived as conforming to the ideal type. We test our theory using data from a university entrepreneurial pitch competition, and find that while teams with female participants receive similar evaluations for their business idea and are no less likely to place second, they are six times less likely to win the competition compared to all-male teams. Implications for diversity and inclusion in organizations are discussed.

*authors contributed equally

Other Writing

Why women (and firms) lose out when we celebrate diversity. January 9, 2020.

Why Investors React Negatively to Companies that Put Women on Their Boards. November 25, 2019.

‘Pink Silos’ in Start-up Funding and How to Avoid Them. INSEAD Knowledge. September 25, 2019.