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The impact of job referrals on employment outcomes in top corporate positions

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  • Levati, Lorenzo Maria
  • Lalanne, Marie

Abstract

Using an original dataset on professional networks of directors sitting on the boards of large US corporations, we examine how personal relationships are used by firms to improve job match quality in the high-skill segment of the labor market. Analyzing explicit social connection data between new hires and recruiters, we are able to test predictions of well established job referral models. We find that referred executive directors have a fifteen percent longer tenure than their non-referred counterparts. Referred executive directors also tend to be similar to their referrers on multiple dimensions, giving support to network homophily hypotheses.

Suggested Citation

  • Levati, Lorenzo Maria & Lalanne, Marie, 2020. "The impact of job referrals on employment outcomes in top corporate positions," SAFE Working Paper Series 268, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:268
    DOI: 10.2139/ssrn.3551182
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    References listed on IDEAS

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    Cited by:

    1. Liu, Guanchun & Lu, Di & Yang, Jinyu, 2023. "Innovation for promotion: The effect of executive involvement on inventors' innovation choice," Journal of Corporate Finance, Elsevier, vol. 80(C).
    2. Marie Lalanne, 2023. "Network‐based appointments and board diversity," Economica, London School of Economics and Political Science, vol. 90(358), pages 409-452, April.

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    More about this item

    Keywords

    Referrals; Job Match Quality; Social Networks; Board of Directors;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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