Business group affiliation and firm performance during institutional transition

Ajai S. Gaur, Andrew Delios

Research output: Contribution to conferencePaper

9 Scopus citations

Abstract

We investigate the performance implications of business group affiliation over a longitudinal period to capture the effects of institutional transitions. Drawing from the institutional voids and market failure perspectives of business groups, we argue that as institutions in a country evolve and markets for capital, labor and products develop, the positive effects of group affiliation will decline, while the negative effects will increase. We test our arguments on a sample of 8,882 Indian firms, 3,087 of which are affiliated with business groups and 5,795 of which are not. We look at the 12 year time period, from 1993-2004, during which there has been substantial development in various markets in India. We find that group affiliation becomes affiliated with lower firm performance during a period in which substantial institutional transitions have taken place.

Original languageEnglish (US)
StatePublished - Dec 1 2006
Externally publishedYes
Event66th Annual Meeting of the Academy of Management, AOM 2006 - Atlanta, GA, United States
Duration: Aug 11 2006Aug 16 2006

Other

Other66th Annual Meeting of the Academy of Management, AOM 2006
CountryUnited States
CityAtlanta, GA
Period8/11/068/16/06

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All Science Journal Classification (ASJC) codes

  • Management Information Systems
  • Management of Technology and Innovation

Keywords

  • Business groups
  • Emerging market firms
  • Institutional transition

Cite this

Gaur, A. S., & Delios, A. (2006). Business group affiliation and firm performance during institutional transition. Paper presented at 66th Annual Meeting of the Academy of Management, AOM 2006, Atlanta, GA, United States.