Ownership identity, strategy and performance: business group affiliates versus independent firms in India

Sumon Bhaumik, Saul Estrin and Tomasz Mickiewicz

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We consider whether the impact of entrepreneurial orientation on business performance is moderated by the company affiliation with business groups. Within business groups, we explore the trade-off between inter-firm insurance that enables risk-taking, and inefficient resource allocation. Risk-taking in group affiliated firms leads to higher performance, compared to independent firms, but the impact of proactivity is attenuated. Utilizing Indian data, we show that risk-taking may undermine rather than improve business performance, but this effect is not present in business groups. Proactivity enhances performance, but less so in business groups. Firms can also enhance performance by technological knowledge acquisition, but these effects are not significantly different for various ownership categories

Keywords: emerging economies; business groups; entrepreneurial orientation; India (search for similar items in EconPapers)
JEL-codes: G32 J50 (search for similar items in EconPapers)
Date: 2017-06-01
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-cse and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Asia Pacific Journal of Management, 1, June, 2017, 34(2), pp. 281-311. ISSN: 0217-4561

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Journal Article: Ownership identity, strategy and performance: Business group affiliates versus independent firms in India (2017)
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