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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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Suggested Citation

  • Berardi, Nicoletta & Seabright, Paul, 2011. "Professional Network and Career Coevolution," TSE Working Papers 11-258, Toulouse School of Economics (TSE).
  • Handle: RePEc:tse:wpaper:25164
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    References listed on IDEAS

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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," TSE Working Papers 11-259, Toulouse School of Economics (TSE).
    2. Lalanne, Marie & Seabright, Paul, 2016. "The old boy network: The impact of professional networks on remuneration in top executive jobs," SAFE Working Paper Series 123, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.

    More about this item

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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