Professional Network and Career Coevolution

42 Pages Posted: 24 Nov 2011

See all articles by Nicoletta Berardi

Nicoletta Berardi

Banque de France - Economic Study and Research Division

Paul Seabright

University of Toulouse I - Industrial Economic Institute (IDEI); Centre for Economic Policy Research (CEPR)

Date Written: November 2011

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 executivesÂ’ 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%.

Keywords: executive compensation, labor mobility, social capital, social networks

JEL Classification: D85, J31, J62, M12

Suggested Citation

Berardi, Nicoletta and Seabright, Paul, Professional Network and Career Coevolution (November 2011). CEPR Discussion Paper No. DP8632, Available at SSRN: https://ssrn.com/abstract=1964122

Nicoletta Berardi (Contact Author)

Banque de France - Economic Study and Research Division ( email )

31, rue Croix des Petits Champs
75049 Paris Cedex 01
FRANCE

Paul Seabright

University of Toulouse I - Industrial Economic Institute (IDEI) ( email )

Manufacture des Tabacs
21 Allee de Brienne bat. F
Toulouse Cedex, F-31000
France
+33 5 61 12 86 17 (Phone)
+33 5 61 12 86 37 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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