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Does Networking Matter More for Men Than Women?

A new study from Lily Fang and Sterling Huang suggests that advice to “network-your-way-to-the-top advice is, for women, a tad overblown.”

The Harvard Business Review explains the study “focuses on 1,815 Wall Street analysts, their school ties, and their forecasts and recommendations between 1993 and 2009. Fang and Huang found that male and female analysts have an equal number of school-based connections — and in fact, in some cases the women were even slightly more connected to the firms they were covering – but that the men seem to get a lot more help from their contacts. When it came to projecting the performance of the firms they were connected to, the male analysts’ forecasts were slightly more accurate, and their buy/sell recommendations were more likely to be followed.”

An excerpt from the working paper:

We find that while connections improve forecast accuracy for analysts across the board, the effect among men is significantly higher. For example, while connections lead to a 2 percent improvement in accuracy rankings in general, among men, there is a further improvement of about 1.8 percent. The effect of connections is even greater in… how the market reacts to their buy and sell calls. Connections improve male analysts’ recommendation impact by about 1.2 percent, but not at all for female analysts.

“The mens’ connections also made them more likely to be recognized by Institutional Investor, a major coup — analysts listed by the magazine tend to earn three times more than other analysts. The women’s connections had no such impact.”

Sarah Green: “To me, the upshot of all of this research is increasingly clear: we need to stop telling women to follow a male playbook. It doesn’t work for women. And I would argue that it doesn’t work that well for companies, either. Raises should go to the people who bring their firms the most value — not those who are simply better at, and less penalized for, asking for them. Promotions ought to be handed out according to who is the smartest and most capable, not according to who appears the most confident. And although there are benefits to social capital, as Fang and Huang’s study makes clear, rewarding the people with the chummiest network simply creates a self-fulfilling cycle.”