Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319068 
Year of Publication: 
2025
Series/Report no.: 
IWH Discussion Papers No. 7 /2025
Publisher: 
Halle Institute for Economic Research (IWH), Halle (Saale)
Abstract: 
Institutional common ownership of firm pairs in the same industry increases the likelihood of a preexisting social connection among their CEOs. We establish this relationship using a quasi-natural experiment that exploits institutional mergers combined with firms' hiring events and detailed information on CEO biographies. In addition, for peer firms, gaining a CEO connection from a hiring firm's CEO appointment correlates with higher returns on assets, stock market returns, and decreasing product similarity between companies. We find evidence consistent with common owners allocating CEO connections to shape managerial decision-making and increase portfolio firms' performance.
Subjects: 
CEO appointments
CEO connections
common ownership
firm performance
product similarity
JEL: 
G23
G32
G34
L21
L22
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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