Innovation in Business Groups
Sharon Belenzon and
Tomer Berkovitz
Management Science, 2010, vol. 56, issue 3, 519-535
Abstract:
Using novel data on European firms, this paper investigates the relationship between business groups and innovation. Controlling for various firm characteristics, we find that group affiliates are more innovative than standalones. We examine several hypotheses to explain this finding, focusing on group internal capital markets and knowledge spillovers. We find that group affiliation is particularly important for innovation in industries that rely more on external funding and in groups with more diversified capital sources, consistent with the internal capital markets hypothesis. Our results suggest that knowledge spillovers are not the main driver of innovation in business groups because firms affiliated with the same group do not have a common research focus and are unlikely to cite each other's patents.
Keywords: business groups; innovation; patents; internal capital markets; knowledge spillovers (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (89)
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http://dx.doi.org/10.1287/mnsc.1090.1107 (application/pdf)
Related works:
Working Paper: Innovation in Business Groups (2007) 
Working Paper: Innovation in Business Groups (2007) 
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:56:y:2010:i:3:p:519-535
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