Business group affiliation and post-acquisition performance: An extended resource-based view

Manish Popli, Radha M. Ladkani and Ajai S. Gaur

Journal of Business Research, 2017, vol. 81, issue C, 21-30

Abstract: Prior research on post-acquisition performance suggests positive, negative, or no wealth creation for the acquiring firms. Grounding our arguments on the extended resource-based view, the current article proposes that business group–affiliated firms leverage their affiliation advantages to attain superior long-term acquisition performance, relative to standalone firms, especially in emerging economies such as India. Additionally, we hypothesize that both within-group heterogeneity, manifested as prior group experience, group diversification, and intra-group variation in the form of horizontal ties through boards of directors, also affect the long-term post-acquisition performance of affiliated firms. The findings, obtained with a buy-and-hold abnormal returns method applied to a sample of 468 majority stake mergers and acquisitions, both domestic and cross-border, by Indian firms during 2005–2013, provide robust support for the theoretical arguments.

Keywords: Business group affiliation; Extended resource-based view; Long-term performance; Mergers and acquisitions (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (42)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:81:y:2017:i:c:p:21-30

DOI: 10.1016/j.jbusres.2017.08.003

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