Best in Class: The Returns on Application Endorsements in Higher Education

While scholars have shown that well-connected applicants are advantaged in selection processes, less understood is whether such applicants produce important returns to the organization when key decision makers favor them. We begin to address this gap by investigating whether and why application endorsements―an informal practice whereby certain individuals (i.e., endorsers) advocate for particular applicants―affect organizational selection during the screening of applicants. Through the analysis of the population of 21,324 applicants to a full-time MBA program over a seven-year period, we find that even after controlling for individual qualifications and competencies, endorsed applicants are advantaged over non-endorsed applicants in admissions interview and offer decisions. In seeking to explain this advantage, we develop and test four key theoretical explanations pertaining to the potential returns on application endorsements for the organization. We find inconsistent evidence that endorsed applicants are “better qualified” compared with non-endorsed applicants during screening: while endorsed applicants are sometimes assessed to be stronger “on paper,” they generally receive lower competency assessments than non-endorsed applicants later, during the admissions interviews. Further, our analysis of data on matriculating MBA students reveals that those endorsed as applicants are not “better performers” academically (measured by grade point average) or in the job market after graduation (measured by full-time salaries or signing bonuses) compared with non-endorsed individuals. In contrast, individuals endorsed as applicants appear to be “better citizens” upon joining the organization—in our research setting, they are more likely to participate in student club leadership roles than non-endorsed individuals. We also find that they are “better alumni”―that is, they make larger monetary donations to the school after graduating than their non-endorsed counterparts. We conclude with implications for understanding the impact of application endorsements on labor and educational markets