Business Group Performance in China: Ownership and Temporal Considerations

Michael Carney, Daniel Shapiro and Yao Tang

Management and Organization Review, 2009, vol. 5, issue 2, 167-193

Abstract: We address the institutional voids hypothesis, which suggests affiliation with a business group will improve a firm's performance in circumstances of poor-quality institutions and extensive market failures. We hypothesize that initial positive effects of group affiliation should decline as the quality of market institutions improves. Further, we hypothesize that differences in state and private ownership will influence the value and persistence of firm affiliation. Using data on 476 publicly listed firms in 1999 and 467 matched firms in 2004, we find support for a temporal hypothesis that affiliation with a business group improves performance, but the value of group affiliation declines over time. We also find support for a state ‘helping hand’ hypothesis that suggests firms with high levels of state ownership initially experienced an amplified value effect from their group affiliation, which disappeared by 2004. The results suggest that China's policy makers are beginning to establish an institutional and market infrastructure that is conducive to entry by unaffiliated, freestanding firms.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
Journal Article: Business Group Performance in China: Ownership and Temporal Considerations (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:maorev:v:5:y:2009:i:02:p:167-193_00

Access Statistics for this article

More articles in Management and Organization Review from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().