Executive Social Connections and Gender Pay Gaps

60 Pages Posted: 13 Apr 2022

See all articles by David Javakhadze

David Javakhadze

Florida Atlantic University

Austin Shelton

California State University, San Bernardino

Date Written: September 7, 2021

Abstract

We examine whether managerial social capital, defined as aggregate benefits of social obligations and informal contacts accrued through social connections, influences gender pay gaps. Consistent with homophily, the tendency to bond and interact with others of similar type, we find a positive association between connections of male executives and compensation. However, these social ties do not enhance firm performance more than connections of female executives. We also demonstrate that connections reduce pay-for-performance sensitivity of male executives. Finally, we document a manifestation of homophily in other corporate decisions. Our findings are robust to model specifications and adjustments for potential endogeneity.

Keywords: Compensation, Gender Wage Gap, Social networks

JEL Classification: G3, G30, G34

Suggested Citation

Javakhadze, David and Shelton, Austin, Executive Social Connections and Gender Pay Gaps (September 7, 2021). Journal of Corporate Finance, Vol. 73, No. 102169, 2022, Available at SSRN: https://ssrn.com/abstract=4061268

David Javakhadze (Contact Author)

Florida Atlantic University ( email )

College of Busines
777 Glades Road
Boca Raton, FL 33433
United States
561-297-2914 (Phone)

Austin Shelton

California State University, San Bernardino ( email )

5500 University Parkway
San Bernardino, CA 92407
United States

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