Old boys’ networks in finance

There are plenty of interesting papers from the ASSA conference that we’ll be mentioning here. The first shows the importance of the old boys’ network for men in finance. Interestingly, women don’t seem to benefit from it and must instead demonstrate their competence in order to gain recognition.


Connection is associated with more accurate earnings forecasts for men, but not for women. Controlling for accuracy, connection is important in explaining men’s, but not women’s, probability of being voted by institutional investors as “star” analysts, an important measure of career success. For women, education achievements and accurate forecasts are important factors that determine voting outcomes. This asymmetry in the effect of connections between the two genders does not exist in an alternative, computerized process of evaluating analysts, and is most pronounced among young analysts. Our results suggest that men reap higher returns from connections than women, and that investors are more willing to rely on soft information such as connections to evaluate men than women.