Promotion through Connections: Favors or Information?

Yann Bramoullé and Kenan Huremović

No 1728, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: Connections appear to be helpful in many contexts such as obtaining a job, a promotion, a grant, a loan or publishing a paper. This may be due to favoritism or to information conveyed by connections. Attempts at identifying both effects have relied on measures of true quality, generally built from data collected long after promotion. This empirical strategy faces important limitations. Building on earlier work on discrimination, we propose a new method to identify favors and information from classical data collected at time of promotion. Under natural assumptions, we show that promotion decisions look more random for connected candidates, due to the information channel. We obtain new identification results and show how probit models with heteroscedasticity can be used to estimate the strength of the two effects. We apply our method to the data on academic promotions in Spain studied in Zinovyeva & Bagues (2015). We find evidence of both favors and information effects at work. Empirical results are consistent with evidence obtained from quality measures collected five years after promotion.

Keywords: promotion; connections; social networks; favoritism; Information (search for similar items in EconPapers)
JEL-codes: C3 I23 M51 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2017-08
New Economics Papers: this item is included in nep-lma
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Related works:
Working Paper: Promotion through Connections: Favors or Information? (2024)
Working Paper: Promotion through Connections: Favors or Information? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1728

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