Performance Impact Of Business Group Affiliation
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Performance Impact Of Business Group Affiliation
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Author : Manohar Singh
language : en
Publisher:
Release Date : 2006
Performance Impact Of Business Group Affiliation written by Manohar Singh and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
To understand the performance implications of corporate strategies as conditioned by business group affiliations, we analyze the relationship between corporate diversification and performance for 889 Indian firms. We find that diversified firms perform significantly worse than focused firms and that there exists a significant negative relationship between the degree of diversification and firm performance. A comparative analysis of firms affiliated with Indian business groups and those affiliated with MNCs indicates that sources of negative impact of diversification on performance are conditioned by the nature of a firm's affiliation. For multinational affiliates, diversification appears to be associated with poor asset quality and asset management, which is an indicator of possible agency conflict. For domestic business group affiliates, diversification appears to generate cost inefficiencies leading to poor performance.
The Impact Of Business Group Affiliation On Performance
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Author : Paul M. Guest
language : en
Publisher:
Release Date : 2012
The Impact Of Business Group Affiliation On Performance written by Paul M. Guest and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
An important aspect of China's economic reforms has been an ambitious policy to develop a 100 or so large, internationally competitive business groups. Very little is known about these national champion groups or the benefits to subsidiary firms of belonging to them. This study, building from insights and methods used in existing literature, examines the performance of subsidiaries affiliated to China's national champion groups. Our results find that they perform comparatively well. We discuss possible reasons for this finding and comment more generally on the important role that business groups now play in China's reform and development.
International Diversification Business Group Affiliation And Firm Performance
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Author : Ajai Gaur
language : en
Publisher:
Release Date : 2010
International Diversification Business Group Affiliation And Firm Performance written by Ajai Gaur and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
We investigate the impact of business group affiliation on the relationship between international diversification and firm performance for emerging economy firms. We develop the theoretical arguments based on an integration of the literature on international diversification with the institutional theory perspective. We argue for a U shaped relationship between international diversification and firm performance, and suggest that a firm's affiliation to a business group moderates the relationship between international diversification and firm performance. Based on a sample of Indian firms, we find that firm performance is positively related to the degree of internationalization, while business group affiliation reduces the positive effect of internationalization on firm performance.
Affiliation And Firm Performance
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Author : Saibal Ghosh
language : en
Publisher:
Release Date : 2010
Affiliation And Firm Performance written by Saibal Ghosh and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
Using data on a sample of Indian firms from 1996 to 2006, we examine the effect of group affiliation on firm performance. After controlling for the differences in firm size, growth opportunities and leverage, the findings indicate that group affiliation exerts a salutary impact on firm performance, measured in terms of adjusted Q or return on assets. Moreover, the evidence indicates that tunnelling is not an important factor driving the valuation and profitability effect of group affiliation.
Effects Of Corporate Group Affiliation To Firm Performance In Malaysia
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Author : Sin Huei Ng
language : en
Publisher:
Release Date : 2017
Effects Of Corporate Group Affiliation To Firm Performance In Malaysia written by Sin Huei Ng and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
This study attempts to show that firms affiliated to family-controlled business groups are associated with poorer performance compared to firms without such affiliation (independent firms) based on the ROA performance measure. Moreover, the empirical evidence suggests that heterogeneity in these business groups, namely group size and group structure, is important in explaining firm performance. Specifically, firms affiliated to large business groups or business groups with complicated ownership structures perform worse than their counterparts. Allocation of resources as measured by the scaled capital expenditure is also found to be inefficient in firms affiliated to business groups, whereas such inefficiency is not found among the independent firms. The inefficient allocation of resources may offer an explanation for the overall underperformance of the group-affiliated firms compared to the independent firms. The overall findings thus imply that the expanded control over a number of listed member firms made possible by business groups increases the chances of expropriation of firm's resources which may well explain the observed inefficient allocation of resources and reduced firm performance. This observation is more prevalent in large and complicated business groups.
The Effect Of Business Group Affiliation On Firm Strategy
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Author : Anna Lamin
language : en
Publisher:
Release Date : 2007
The Effect Of Business Group Affiliation On Firm Strategy written by Anna Lamin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
Board Diversity And Firm Performance
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Author : Raj Aggarwal
language : en
Publisher:
Release Date : 2019
Board Diversity And Firm Performance written by Raj Aggarwal and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
There is little consensus globally on the relationship between board diversity and firm performance. Using the resource dependence and agency views, this paper examines how business group affiliation influences the relationship between board diversity and firm performance as a contextual/confounding factor. Based on data for listed firms in India, we find that board demographic diversity is positively associated with the firm performance (Tobin's Q) of standalone firms, but this association is negative for group-affiliated firms. This negative effect of group affiliation is confirmed in a test based on a novel measure of firm performance using the stock market reaction to the announcement of mergers and acquisitions. For both measures of performance, we show that business group affiliation impairs the positive firm value effects of board demographic diversity. These findings imply that the relationship between board diversity and firm performance requires re-examination in the many countries where group affiliation is common. Our results also provide evidence of a new cost of group affiliation and show in a fresh context that cross-country studies should account for international variations in ownership and institutional structures.
The Performance Effects Of Business Groups In Russia
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Author : Saul Estrin
language : en
Publisher:
Release Date : 2009
The Performance Effects Of Business Groups In Russia written by Saul Estrin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
This study analyses the impact of business group affiliation on firm performance during a time when business groups are newly formed, when the economic and institutional environment is changing, and when group survival is uncertain. Based primarily on a transaction cost approach, we develop two hypotheses, concerning profitability and risk sharing (redistribution) respectively. The positive profitability hypothesis proposes that company affiliation with a business group directly and positively affects the profitability of each affiliate. A positive direct effect emerges when each affiliate benefits from access to group resources. The redistribution hypothesis considers the simultaneous possibility that inter-affiliate transfers of resources through internal markets are designed to redistribute profits among group members. We argue that variance-reducing redistribution from strong to weak group members is linked to group survival in times of institutional change. Our empirical approach focuses on testing these two linked hypotheses (and their alternatives) using a relatively large, contemporary and time varying database of Russian firms. We also develop a framework that distinguishes among the four possible empirical outcomes associated with the hypotheses. Our results provide unambiguous support for the case where the impact of group membership on profitability is positive and redistribution is variance-reducing. We term this outcome Business Group Robustness, and contrast it with other possible empirical outcomes.
Internalization Advantage And Subsidiary Performance
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Author : Ajai Gaur
language : en
Publisher:
Release Date : 2019
Internalization Advantage And Subsidiary Performance written by Ajai Gaur and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
We extend internalization theory by examining the contingencies associated with market internalization and its impact on foreign subsidiary survival. Based on a sample of 6170 subsidiary-year observations in 63 countries belonging to 292 MNCs from Korea during 1995 to 2013, we find that greater product and labor market internalization have a weaker impact on the survival of subsidiaries operating in countries with more developed institutional environments but stronger for subsidiaries of MNCs affiliated with business groups. The impact of business group affiliation is further dependent on host country institutional development, and the diversification and size of the business group.
Business Group Affiliation Firm Governance And Firm Performance
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Author : Deeksha A. Singh
language : en
Publisher:
Release Date : 2014
Business Group Affiliation Firm Governance And Firm Performance written by Deeksha A. Singh and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Using an integration of agency theory with an institutional perspective, we investigate how business group affiliation, with-in firm governance and external governance environment affect firm performance in emerging economies. Using archival data on top 500 Indian and Chinese firms from multiple data sources for 2007, we found that group affiliated firms performed worse than unaffiliated firms, and the negative relationship was stronger in the case of Indian firms than Chinese firms. We also found that ownership concentration had a positive effect on firm performance, while board independence had a negative effect on firm performance. Further, we found that group affiliation - firm performance relationship in a given country context was moderated by ownership concentration.