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http://hdl.handle.net/10419/57783
  
Title:Does it pay to have friends? Social ties and executive appointments in banking PDF Logo
Authors:Berger, Allen N.
Kick, Thomas
Koetter, Michael
Schaeck, Klaus
Issue Date:2011
Series/Report no.:Discussion Paper Series 2: Banking and Financial Studies 2011,18
Abstract:Social capital theory predicts individuals establish social ties based on homophily, i.e., affinities for similar others. We exploit a unique sample to analyze how similarities and social ties affect career outcomes in banking based on age, education, gender, and employment history to examine if homophily and connectedness increase the probability that the appointee to an executive board is an outsider (an individual without previous employment at the bank) compared to being an insider. Our results show that homophily based on age and gender raises the chance of the successful candidate being an outsider, whereas similar educational backgrounds reduce the chance that the appointee comes from outside. When we examine performance effects, we find weak evidence that social ties are associated with reduced profitability.
Subjects:Social networks
executive careers
banking
corporate governance
JEL:G21
G32
G34
J16
ISBN:978-3-86558-787-9
Document Type:Working Paper
Appears in Collections:Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank

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