Commonality in Total Asset Growth

We discover the existence of commonality in total asset growth among groups of firms having connected CEOs. Drawing from the social identity theory, we hypothesize that total asset growth rates of firms, whose CEOs are connected, comove due to group influence. Using biographical information of US CEOs over 17 years, we show that CEO connectedness facilitates commonality in total asset growth. Commonality in total asset growth is generated by the adoption of related M&As and R&D strategies. We also find commonality in total asset growth across connected firms negatively impacts shareholder value. Our results are robust to endogeneity controls and alternative explanations