International Diversification, Business Group Affiliation and Firm Performance: Empirical Evidence from India

2009 ◽  
Vol 20 (2) ◽  
pp. 172-186 ◽  
Author(s):  
Ajai S. Gaur ◽  
Vikas Kumar
Keyword(s):  
Firm Performance ◽  
Empirical Evidence ◽  
International Diversification ◽  
Business Group ◽  
Group Affiliation ◽  
Business Group Affiliation

Corporate governance, firm performance, and business group affiliation: evidence from India

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Neeti Khetarpal Sanan ◽  
Dinesh Jaisinghani ◽  
Sangeeta Yadav
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Empirical Evidence ◽  
Emerging Economies ◽  
Chief Executive ◽  
Business Group ◽  
Independent Directors ◽  
Group Affiliation ◽  
Content Type ◽  
Business Group Affiliation

Purpose The purpose of this paper is to investigate whether, in emerging economies, the relationship between a firm’s corporate governance (CG) and its performance is associated with firm’s affiliation to a business group. Design/methodology/approach A total of 209 publicly listed firms in India during a 10-year period from 2007 to 2016 were studied, and the random effects model was employed for analysis. Findings Empirical evidence showed that board size and institutional shareholding positively impacted firm performance, whereas the proportion of independent directors negatively impacted performance. In group-affiliated firms in emerging economies, chief executive officer duality negatively impacted, whereas institutional shareholding positively impacted performance. These results are consistent with the principal–principal agency theory. The study found no discernible impact of proportion of independent directors on firm performance in group-affiliated firms. Originality/value In analyzing the governance–performance relationship and its association with business groups, this study extends current understanding by connecting business group research in emerging economies with CG and firm performance research. In examining firms from several industries over a long period of time after controlling for firm size, capital structure and spends on research and development and marketing, the results of this study offer rich empirical evidence that contributes to the extant literature on the nature of the governance–performance relationship.

International new ventures and firm performance: evidence from India

2018 ◽  
Vol 30 (6) ◽  
pp. 645-659
Author(s):  
Mohammad Fuad ◽  
Mohammad Akbar
Keyword(s):  
Firm Performance ◽  
New Ventures ◽  
Business Group ◽  
International New Ventures ◽  
Group Affiliation ◽  
Content Type ◽  
Business Group Affiliation ◽  
Positive Effect ◽  
Moderating Role

Purpose This study aims to explore the role of liberalization, business group affiliation and degree of internationalization (DOI) on the performance of Indian international new ventures (INVs). Design/methodology/approach The study identifies Indian INVs incorporated between 1991 and 2010 against the backdrop of liberalization. To test various hypotheses, a random effects panel regression analysis was conducted for publicly listed Indian INVs. Findings The results highlight that business group affiliation and DOI are positively related to INV performance. Further, liberalization negatively moderates the relationship between group affiliation and INV performance. The authors’ findings indicate that as institutions improve, the positive effect of business group affiliation on firm performance decreases in emerging markets. Research limitations/implications This paper highlights the benefits accruing to business group affiliated INVs and the moderating role of liberalization on firm performance. Future studies may augment the authors’ understanding of INV performance by testing heterogeneity within business groups and their impact on INV performance across other emerging economies. Practical implications As institutional reforms strengthen over time, the positive effect of group affiliation on INV performance declines. Hence, managers of group affiliates need to adapt to the changing institutions faster and develop their fit with the institutional environment earlier than standalone firms, to mitigate their profitability issues. Originality/value To the best of the authors’ knowledge, this is the first paper to discuss the role of business group affiliation and the moderating role of liberalization on INV performance with theoretical and managerial implications.

scholarly journals The Effects of Losing a Business Group Affiliation

2018 ◽  
Vol 32 (8) ◽  
pp. 3036-3074 ◽  
Author(s):  
Borja Larrain ◽  
Giorgo Sertsios ◽  
Francisco Urzúa I
Keyword(s):  
Business Group ◽  
The Other ◽  
Group Affiliation ◽  
Oxford University ◽  
Capital Misallocation ◽  
Editorial Decision ◽  
Business Group Affiliation ◽  
Industry Peers ◽  
Published Paper ◽  
Identification Strategy

Abstract We propose a novel identification strategy for estimating the effects of business group affiliation. We study two-firm business groups, some of which split up during the sample period, leaving some firms as stand-alone firms. We instrument for stand-alone status using shocks to the industry of the other group firm. We find that firms that become stand-alone reduce leverage and investment. Consistent with collateral cross-pledging, the effects are more pronounced when the other firm had high tangibility. Consistent with capital misallocation in groups, the reduction in leverage is stronger in firms that had low (high) profitability (leverage) relative to industry peers. Received July 3, 2017; editorial decision April 7, 2018 by Editor Wei Jiang. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Sign in / Sign up

Export Citation Format

Share Document