Preference or Persistence? The Origins and Implications of Homophily in Entrepreneurial Networks

Homophily in social networks is common across a range of social settings. However, the particular processes through which people construct homophilous social networks are not well understood. We theorize that two processes could lead to homophily in an individual's social networks and test them using data from an entrepreneurial mentoring program. In one possible model, people are more likely to initiate relationships with similar others because they prefer those relationships. Alternatively, people could find that of the relationships they begin, homophilous relationships are more valuable, leading homophilous relationships to persist longer. Entrepreneurs in this program were given the opportunity to request which mentors they worked with and did not request mentors of their gender more frequently, indicating that were not more likely to initiate homophilous relationships. However, relationships between entrepreneurs and mentors of the same gender become more persistent working relationships and lead to more referrals on the entrepreneurs' behalf, indicating that homophilous relationships were more valuable. Men mentors disproportionately made fewer referrals on behalf of female entrepreneurs. The results indicate that homophilous networks could emerge endogenously as entrepreneurs seek relationships that can offer valuable resources and provide insight into inequality in access to network-based resources.