Promotion through Connections: Favors or Information?

Yann Bramoull\'e and Kenan Huremovi\'c
Authors registered in the RePEc Author Service: Kenan Huremović and Yann Bramoullé

Papers from arXiv.org

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 either 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. Building on earlier work on discrimination, we propose a new method to identify favors and information from data collected at the time of promotion. Under weak assumptions, we show that promotion decisions for connected candidates look more random to the econometrician due to the information channel. We derive new identification results and estimate the strength of the two effects. We adapt the control function approach to address the issue of the selection into connections. Applying our methodology to academic promotions in Spain and Italy, as well as political advancements in China, we find evidence that connections may both convey information and attract favors.

Date: 2017-08, Revised 2024-05
New Economics Papers: this item is included in nep-lma and nep-soc
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http://arxiv.org/pdf/1708.07723 Latest version (application/pdf)

Related works:
Working Paper: Promotion through Connections: Favors or Information? (2017)
Working Paper: Promotion through Connections: Favors or Information? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1708.07723

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