 Promotion through Connections: Favors or Information?Bramoullé, Yann and Kenan Huremovic No 21660, CEPR Discussion Papers from Centre for Economic Policy Research 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. Building on earlier work on discrimination, we propose a new method that identifies these channels using data observed at the time of promotion. The method exploits distinct implications of the two effects on the relationship between observables and success. We show that extra information on connected candidates generates excess variance in latent errors while favors yield different promotion thresholds. We characterize the conditions under which both effects are identified and operationalize these ideas econometrically within a semiparametric framework. We also derive testable restrictions of the model and show how to account for connection endogeneity. We reanalyze data on academic promotions in Spain and Italy and political promotions in China. We detect evidence of favoritism for all types of candidates and of information effects for candidates applying to junior positions. We find strong support for the model’s testable restrictions. Keywords: Promotion; Connections; Social Networks; Favoritism (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:21660 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK. |
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