Business group heterogeneity and the internationalization-performance relationship: Evidence from Indian business groups

Saptarshi Purkayastha (), Vikas Kumar () and Jane Wenzhen Lu ()
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Saptarshi Purkayastha: Indian Institute of Management Calcutta
Vikas Kumar: University of Sydney Business School
Jane Wenzhen Lu: The University of Melbourne

Asia Pacific Journal of Management, 2017, vol. 34, issue 2, No 2, 247-279

Abstract: Abstract Business groups, the dominant organizational form in many Asian markets, have expanded their operations into international markets. We combine the resources-based view with the institutional perspective to highlight the costs and benefits of business groups’ internationalization, rather than business groups’ affiliated firms’ internationalization, and consider how ownership heterogeneity among business groups influences the internationalization-performance relationship. Three ownership types—family, domestic financial institution, and foreign corporate—serve as distinguishing characteristics of business groups and potential moderators of this relationship. In a sample of 185 Indian business groups examined over more than a decade (2000–2010), we find that these three ownership types have a differential impact on the internationalization-performance relationship¸ depending on the level of internationalization of the business group. Specifically¸ we find that at lower levels of internationalization, family and foreign corporate ownership has a positive moderating effect whereas domestic financial institutional ownership has a negative moderating effect. Conversely¸ at higher levels of internationalization, family and foreign corporate ownership has a negative moderating effect, while domestic financial institutional ownership positively moderates the internationalization-performance relationship.

Keywords: Business groups; Ownership heterogeneity; Internationalization; Business group performance (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (24)

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DOI: 10.1007/s10490-016-9489-5

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