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The Formation and Imprinting of Network Effects Among the Business Elite

Posted on by Brandon Klein

The business elite constitutes a small but strikingly influential subset of the population, oftentimes affecting important societal outcomes such as the consolidation of political power, the adoption of corporate governance practices, and the stability of national economies more broadly. Here we analyze a unique dataset of all MBA students at a top 5 MBA program. After matching students on all available characteristics (e.g., age, grade scores, industry experience, etc.) - i.e. creating twin pairs - we find that the distinguishing characteristics between students who do well in job placement and those who do not is their network. Further, we find that the network differences between the successful and unsuccessful students develops within the first month of class and persists thereafter, suggesting a network imprinting that is persistent. Finally, we find that these effects are pronounced for students who are at the extreme ends of the distribution on other measures of success - students with the best expected job placement do particularly poorly without the right network (descenders), whereas students with worst expected job placement pull themselves to the top of the placement hierarchy (ascenders) with the right network.