T his paper presents new evidence regarding a firm's probability for survival, based on the network structure of the firm's managers. We found that start-ups that have larger informal communication networks increased their chance to survive external shock. Original data have been collected from Israeli software start-ups during the dot-com economic growth. About eight years later, we added information about their ability to survive the burst of the dot-com bubble. From a theoretical point of view, this paper highlights the power of the classic social networks approach in explaining organizational performance. From a practical point of view, these findings offer some guidelines for managers of start-ups. Our results show that the size of informal interfirm networks really matters.

Purpose-This paper examines the innovative capabilities of biotech start-ups in relation to geographic proximity and knowledge sharing interaction in the R&D network of a major hightech cluster. Design/methodology/approach-This study compares longitudinal informal communication networks of researchers at biotech start-ups with company patent applications in subsequent years. For a year, senior R&D staff members from over 70 biotech firms located in the Boston Biotech cluster were polled and communication information about interaction with peers, universities, and big pharmaceutical companies was collected, as well as their geo-location tags. Findings-Location influences the amount of communication between firms, but not their innovation success. Rather, what matters is communication intensity and recollection by others. In particular, there is evidence that rotating leadership-changing between a more active and passive communication style-is a predictor of innovative performance. Practical implications-Expensive real-estate investments can be replaced by maintaining social ties. A more dynamic communication style and more diverse social ties are beneficial to innovation. Originality/value-Compared to earlier work that has shown a connection between location, network, and firm performance, this paper offers a more differentiated view; including a novel measure of communication style, using a unique dataset, and providing new insights for firms who want to shape their communication patterns to improve innovation, independently of their location.

participants in the Workshop on Network Dynamics at the Russell Sage Foundation. 2 Continuous punishment and the potential of gentle rule enforcement The paper explores the conditions that determine the effect of rule enforcement policies that imply an attempt to punish all the visible violations of the rule. We start with a simple game theoretic analysis that highlights the value of gentle COntinuous Punishment (gentle COP) policies. If the subjects of the rule are rational, gentle COP can eliminate violations even when the rule enforcer has limited resources. The second part of the paper uses simulations to examine the robustness of gentle COP policies to likely deviations from rationality. The results suggest that when the probability of detecting violations is sufficiently high, gentle COP policies can be effective even when the subjects of the rule are boundedly rational adaptive learners. The paper concludes with experimental studies that clarify the value of gentle COP policies in the lab, and in attempt to eliminate cheating in exams.Keywords: The economics of small decisions, decisions from experience, underweighting of rare events, social enforcement.3

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