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Executive social connections and gender pay gaps

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  • Javakhadze, David
  • Shelton, Austin

Abstract

We examine whether managerial social capital, defined as aggregate benefits of social obligations and informal contacts accrued through social connections, influences gender pay gaps. Consistent with homophily, the tendency to bond and interact with others of similar type, we find a positive association between connections of male executives and compensation. However, these social ties do not enhance firm performance more than connections of female executives. We also demonstrate that connections reduce pay-for-performance sensitivity of male executives. Finally, we document a manifestation of homophily in other corporate decisions. Our findings are robust to model specifications and adjustments for potential endogeneity.

Suggested Citation

  • Javakhadze, David & Shelton, Austin, 2022. "Executive social connections and gender pay gaps," Journal of Corporate Finance, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:corfin:v:73:y:2022:i:c:s0929119922000128
    DOI: 10.1016/j.jcorpfin.2022.102169
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    More about this item

    Keywords

    Compensation; Gender wage gap; Social networks;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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