Business groups and export performance: the role of coordination failures and institutional configurations

Daniel Shapiro, Saul Estrin, Michael Carney and Steven Liang

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We explore the nature of business groups (BGs) and their affiliates in emerging markets through the lens of the coordination failures associated with economic development. We propose that BGs develop distinct economic and political capabilities that provide affiliates with access to the complementary resources required for successful exporting. We further argue that these capabilities are context-specific, based on the market and political institutions of the home country. We propose that the BG advantage in supporting affiliate exporting increases as market institutions strengthen but is reduced (strengthened) as political systems become more democratic (autocratic). We apply Tobit estimation methods to a large sample of firms from emerging and developing countries at different stages of institutional development and find consistent evidence in favour of our hypotheses. We develop a framework to analyse alternative BG internationalization paths in a comparative institutional context.

Keywords: business groups; exporting; coordination failures; emerging markets; market institutions; political systems (search for similar items in EconPapers)
JEL-codes: J50 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2024-09-30
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Published in Journal of Management Studies, 30, September, 2024, 61(6), pp. 2303 - 2337. ISSN: 0022-2380

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