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Professional Network and Career Coevolution

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  • Berardi, Nicoletta
  • Seabright, Paul

Abstract

This paper examines how networks of professional contacts contribute to the development of the careers of executives of European and US companies. We build a dynamic model of career progression in which career moves both depend upon existing networks and contribute to the development of future networks. We test the theory on an original dataset of nearly 7000 executives in over 3000 firms. We find evidence that professional networks are relevant both because valuable for the employer and because they facilitate job mobility. Our estimates of the elasticity of executives’ salaries with respect to the size of their professional networks vary between around 5% and around 20% depending on the specification, with a point estimate under our preferred specification of 6.7%.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8632.

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Date of creation: Nov 2011
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Handle: RePEc:cpr:ceprdp:8632

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Keywords: executive compensation; labor mobility; social capital; social networks;

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Cited by:
  1. Lalanne, Marie & Seabright, Paul, 2011. "The Old Boy Network: Gender Differences in the Impact of Social Networks on Remuneration in Top Executive Jobs," CEPR Discussion Papers 8623, C.E.P.R. Discussion Papers.

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