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The compensation premium of social networks: How social networks affect employment stability and wage income

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  • Ma, Wanli
  • Zhang, Jie

Abstract

Using a panel of publicly listed firms from 2013 to 2023, this study examines how corporate social networks and firm financialization shape employees’ job stability and wage earnings. The evidence suggests four main findings. First, stronger corporate social networks are associated with lower employment stability, implying more frequent job turnover or less secure positions. Second, stronger corporate social networks correspond to higher employee wages, indicating that network advantages may translate into better pay outcomes. Third, a higher degree of corporate financialization strengthens the negative relationship between social networks and employment stability, amplifying the destabilizing effect. Fourth, financialization also reinforces the positive effect of social networks on wage income, making the wage premium larger when firms allocate more resources to financial activities. Overall, the study offers a fresh lens for understanding how networking and financialization jointly influence labor outcomes in contemporary firms, and it provides practical implications for compensation design and human resource management policies.

Suggested Citation

  • Ma, Wanli & Zhang, Jie, 2026. "The compensation premium of social networks: How social networks affect employment stability and wage income," Finance Research Letters, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:finlet:v:95:y:2026:i:c:s1544612326002278
    DOI: 10.1016/j.frl.2026.109696
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