Business group affiliation as institutional linkages in China’s emerging economy: A focus on organizational traits and institutional conditions

Xufei Ma () and Jane Wenzhen Lu ()
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Xufei Ma: Chinese University of Hong Kong
Jane Wenzhen Lu: The University of Melbourne

Asia Pacific Journal of Management, 2017, vol. 34, issue 3, No 8, 675-697

Abstract: Abstract We conceptualize business group affiliation as institutional linkages by integrating the resource-based view and institutional perspective to examine its direct and moderating effects on firm value in emerging economies. In a sample of 1233 Chinese listed companies, we find that while business group affiliation has mixed direct effects, it moderates the effects of organizational traits and institutional conditions on firm value. Specifically, group affiliation aggravates old firms’ “liability of oldness,” but helps mitigate large firms’ “liability of bigness.” Besides, business group affiliation can reduce the liabilities that institutional voids bring about, as evidenced in its moderating effects on the relationship between regional under-development/industrial restriction and firm value. Our findings point to the moderating effects of business group affiliation in emerging economies.

Keywords: Business group affiliation; Institutional linkages; Resource-based view; Institutional perspective; Firm value; Emerging economies (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s10490-017-9517-0

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