Adina D. Sterling

Network Progeny? Prefounding Social Ties and the Success of New Entrants

Entrepreneurs that were employed by successful industry incumbents prior to founding tend to confer advantages on their new organizations. We propose and then demonstrate a similar “network progeny” effect rooted in the social relationships that form among entrepreneurs. Our analysis of new entrants into the Ontario wine industry shows that prefounding friendship ties of the founders of one especially prominent entrepreneurial firm led to significantly higher ice wine prices. This attests to the promise of a network progeny extension of the parent--progeny account of new firm success. Follow-on analysis indicates that this effect is not attributable to an entrants ability to make ice wines of superior quality or to it having access to better distribution knowledge. We therefore conclude that having a social tie to this prominent entrepreneurial firm generated reflected prominence that enhanced the valuations and therefore prices of wines made by connected market entrants. This paper was accepted by Jesper Sorensen, organizations.

Lasting Effects? Referrals and Career Mobility of Demographic Groups in Organizations

While prior research has suggested that network-based hiring in the form of referrals can lead to better career outcomes, few studies have tested whether such career advantages differ across demographic groups. Using archival data from a single organization for nearly 16,000 employees over an 11-year period, the authors examine the effect of hiring by referrals on the number of promotions employees receive and the differences in this effect across demographic groups. Drawing on theories of referral-based hiring, inequality, and career mobility, they argue that referral-based hiring provides unique promotion advantages for minorities compared to those hired without a referral. Consistent with this argument, they find that referrals are positively associated with promotions for one minority group, blacks, even after controlling for individual and regional labor market differences. The authors explore the possible mechanism for this finding, with initial evidence pointing to referrals providing a signal of quality for black employees. These results suggest refinement to prior research that attests that referral-based hiring disadvantages racial minorities.

Once in the Door: Gender, Tryouts, and the Initial Salaries of Managers

Although women pursue managerial credentials at nearly the same rate as men, gender disparities in wages exist because of the shortfall in wages women sustain relative to men at the onset of their careers. This article develops a tryout approach to test for the presence of demand-side contributions to initial wage inequality while also developing and testing theory on why it may be lessened through internships. Using detailed data on graduates from an elite management program from 2009–2010, our analyses reveal that internships are associated with the gap in men’s and women’s initial salaries. For men, there is no difference in salary offers from employers where an internship occurs versus one where an internship does not occur. However, women receive higher salaries from employers where an internship first takes place. This paper was accepted by Olav Sorenson, organizations.

Lasting Effects? Hiring Through Referrals and the Post-Entry Career Outcomes of African Americans and Women

The authors examine the effects of referral-based hiring on the number of promotions employees receive after entering organizations and the differences in this effect across demographic groups using a two-study multi-method approach. The first study uses data collected from a single organization on approximately 16,000 employees hired over an eleven-year period, while a second study uses data collected from two experiments. The authors theorize that referral-based hiring will disproportionately increase African American’s and women’s number of promotions because it legitimates otherwise traditionally illegitimate employees within organizations. Consistent with this expectation, the authors find evidence that referral-based hiring has a positive effect on promotions for African Americans compared to Caucasians but no disparate effect on the promotions of women compared to men in the first study. In the second study, and in line with their theorizing, they find evidence that the positive benefits of referrals that accrue to African Americans stem from legitimation benefits that affect careers.

Gender, Trial Employment, and Initial Salaries

Gender disparities in wages among professionals exist because women begin their professional careers making less than men. Prior research indicates this occurs because employers lack information about prospective employees at the hiring stage which triggers discrimination and bias in wage setting. Building on work that suggests organizational practices impact inequality, we examine if trial employment affects initial salaries by providing employers a first-hand look at candidates prior to employers making permanent hiring decisions. Using a unique data set that is well-suited for this inquiry, we find evidence that a female wage discount occurs among entry-level business professionals. However, as predicted, the female wage discount dissipates when offers are received from employers where trial employment takes place.

Gender, Productivity, and Collaborative Networks in Science

It has long been noted that women in STEM fields have poor quality networks compared to men. In this article, we question whether the network deficits women face are insurmountable. Using data on more than 3,500 scientists over a twenty year period, we study the influence of scientific productivity on the status of scientists’ network affiliates. We find that scientists have greater access to high status affiliates as their productivity improves, and that women receive greater gains to their networks from productivity than men. Our findings suggest differential returns to productivity by gender, and highlight the benefits women’s networks receive when organizations use objective criteria like productivity, versus ascribed characteristics such as gender, in network allocation decisions.