The Performance of Business Group Firms During Institutional Transition: A Longitudinal Study of Indian Firms

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The Performance of Business Group Firms During Institutional Transition: A Longitudinal Study of Indian Firms

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dc.contributor.author Kumar, Vikas en_US
dc.contributor.author Pedersen, Torben en_US
dc.contributor.author Zattoni, Alessandro en_US
dc.date.accessioned 2009-02-04T10:27:19Z
dc.date.available 2009-02-04T10:27:19Z
dc.date.issued 2008-07-30T00:00:00Z en_US
dc.identifier.isbn 9788791815386 en_US
dc.identifier.uri http://hdl.handle.net/10398/7430
dc.description.abstract Manuscript Type: Empirical Research Question/Issue: Institutional and transaction costs theories highlight the idea that group affiliated firms outperform unaffiliated firms in emerging economies. The persistence of superior performance for group affiliated firms is, however, questioned by the fast and recent development of markets and institutions in these countries. In this article, we explore this link between firm performance and the evolution of institutional environment. Research Findings/Insights: The setting of the empirical investigation is India in the postreform era (post 1990). We test for effects of business group affiliation on firm performance over a 17 year time period from 1990 to 2006. Our findings show that (i) the performance benefits of group affiliation erode with the evolution of the institutional environment; (ii) older affiliated firms are better able to cope with institutional transition than younger affiliated firms; (iii) service-sector affiliated firms are better able to cope with institutional transition than manufacturing-sector affiliated firms. Theoretical/Academic Implications: Our findings both support the institution- and transaction costs-based theory of business groups, and extends it by incorporating a dynamic and longitudinal component. They also demonstrate – in line with recent works - that the benefits of group membership differ for different types of member firms. Practitioner/Policy Implications: The article has implications for both managers and policy makers. Managers of business groups should timely adapt their strategy to the evolution of the institutional environment. Policy makers should, instead, devote attention to the consequences of their policies because they may undermine the efficiency of large national companies. en_US
dc.format.extent 35 s. en_US
dc.language eng en_US
dc.relation.ispartofseries Working paper;2008-25 en_US
dc.title The Performance of Business Group Firms During Institutional Transition: A Longitudinal Study of Indian Firms en_US
dc.type wp en_US
dc.accessionstatus modt08jul30 nijemo en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Center for Strategi og Globalisering en_US
dc.contributor.departmentshort SMG en_US
dc.contributor.departmentuk Center for Strategic Management and Globalization en_US
dc.contributor.departmentukshort SMG en_US
dc.idnumber 9788791815386 en_US
dc.publisher.city København en_US
dc.publisher.year 2008 en_US


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