Business Group Affiliation and Firm Performance—Evidence from Pakistani Listed Firms
Waseem Ullah and
Additional contact information
Waseem Ullah: University of Gurjat, Gurjat.
Arshad Hasan: Capital University of Science and Technology, Islamabad.
Authors registered in the RePEc Author Service: Arshad hassan ()
The Pakistan Development Review, 2018, vol. 57, issue 3, 351-371
This study analyses the financial performance of business group affiliated firms relative to stand-alone firms in Pakistan. The investigations are done across the sample period of 1993-2012. The study employs ‘Chop shop’ methodology to construct the excess values (performance measure); in order to compare the results with earlier well documented studies of both developed and emerging countries. Both univariate and regression analyses clearly demonstrate that group affiliated firms are trading at discount (underperform relative to stand-alone firms) during the sample period. Despite the historical success in the past, the findings suggest that business groups evolve differently in the post financial reforms and privatisation programs era. The findings are consistent with the market failure argument and agency theory. However, the study finds a little evidence of efficient internal markets of Pakistani business groups.
Keywords: Business Groups; Group Affiliation; Excess Value; Market Failure Theory; Agency Theory; Chop Shop Methodology (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pid:journl:v:57:y:2018:i:3:p:351-371
Access Statistics for this article
More articles in The Pakistan Development Review from Pakistan Institute of Development Economics Contact information at EDIRC.
Bibliographic data for series maintained by Khurram Iqbal ().