What Explains Small and Medium-Sized Business Groups? Comparing the Financial and the Entrepreneurial Perspective

Donato Iacobucci (), Enrico Guzzini and Peter Rosa

Review of Economics and Institutions, 2015, vol. 6, issue 1

Abstract: The paper contrasts two theoretical perspectives that account for business group formation in the small business sector: the financial perspective and the organizational/entrepreneurial perspective. Two main hypotheses are derived from these perspectives: the first hypothesis concerns capital and knowledge intensity required by the business; the second one refers to the entrepreneur’s ownership of firms in business groups. The empirical results show that the financial and the organizational perspectives are both relevant in explaining business groups in the small business sector, but the entrepreneurial perspective is more appropriate when explaining the ownership structure of firms within an entrepreneur’s business group.

Keywords: business groups; small businesses; portfolio entrepreneurs; ownership; diversification (search for similar items in EconPapers)
JEL-codes: D22 M13 M21 (search for similar items in EconPapers)
Date: 2015
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