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Professional Network and Career Coevolution

  • Berardi, Nicoletta
  • Seabright, Paul

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 Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 688.

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Date of creation: 2011
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Handle: RePEc:ide:wpaper:25163
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  1. Giorgio Topa & Stephen Ross & Patrick Bayer, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 05-23, Center for Economic Studies, U.S. Census Bureau.
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  16. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, vol. 94(3), pages 426-454, June.
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