Friday, November 25, 2011

FANG Lily, HUANG Sterling
Gender and Connections among Wall Street Analysts
INSEAD Working Paper 2011/122/FIN

We study the interplay between gender and connections among Wall Street analysts. We measure connection using the Cohen, Frazzini, and Malloy school ties between analysts and the firms they cover. Male and female analysts are equally connected with companies they cover. Connection is associated with more accurate earnings forecasts and more impactful stock recommendations for men, but not for women. Connection significantly improves men’s career outcomes such as promotions, but not women’s. For women, Ivy-League education and accurate forecasts are rewarded. Our results are consistent with the notion in sociology that men reap higher returns from social capital than women.