Better the Devil You Know: Managers’ Networks and Their Influence on Hiring, Responsibilities, and Performance

This paper investigates how managers leverage their professional networks (former employees) to influence three key dimensions: hiring, responsibilities, and performance. We use rich transactional data in professional football (soccer) in Europe: over 6k coaches, 80k players, and 100k movements. First, we find that managers rely heavily on their networks for hiring, particularly for non-star workers, and at a somewhat lower cost. Second, managers give network-hired workers more responsibilities, particularly in the first year. Third, network-recruited workers are significantly positively associated with performance. We conduct additional heterogeneity analyses and robustness tests, and discuss generalizability and implications for managers in other industries.