Does Homophily Affect Performance?
(under first round review at Administrative Science Quarterly)
Abstract
This paper studies how homophily shapes informal knowledge-exchange networks and affects the performance of knowledge workers. We argue that, while homophily might make it easier for workers to request and obtain knowledge from colleagues, it might also prompt them to approach less qualified colleagues. Consistent with past research, we find evidence of homophily in knowledge-exchange networks among employees in a global investment bank. More importantly, we show that although a colleague‘s ability to provide valuable inputs predicts seeking help from this colleague, the effect is dampened for homophilous ties. This suggests that a trade-off might exist between the accessibility of homophilous colleagues and the ability of colleagues to provide valuable task inputs. Taking this into account, we argue that homophilous tendencies should have a positive effect on the performance of employees who are likely to experience difficulties in securing help from colleagues, but it should hinder the performance of employees who face fewer obstacles in obtaining such help.