Political Connections, Business Groups and Innovation

Simon Commander (), Saul Estrin () and Thamashi De Silva
Additional contact information
Simon Commander: IE Business School, Altura Partners
Saul Estrin: London School of Economics
Thamashi De Silva: Capital Economics

No 16007, IZA Discussion Papers from IZA Network @ LISER

Abstract: It has been argued that Asia's remarkable economic achievements of the past 50 years build on institutional arrangements very different from the West, notably the central role of business groups (BGs). As Asian economies move from extensive to intensive growth, we enquire whether the business group organsational format will be as effective going forward. We argue that the ubiquity of BGs has been associated with the accretion of major market power, as well as overall concentration. Our empirical work, drawing on a sample of more than 9000 Asian firms, finds that while BGs are more innovative than non-affiliates, this is unsurprising given their access to additional resources. However, when we look at innovation at the country level, we find that the wider consequences of BGs on innovation may be negative.

Keywords: market power; Asian business groups; R&D; innovation; overall concentration (search for similar items in EconPapers)
JEL-codes: L22 O30 O53 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2023-03
New Economics Papers: this item is included in nep-com, nep-ino, nep-sea and nep-tid
References: View references in EconPapers View complete reference list from CitEc
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Published - published in: Comperative Economic Studies, 2024, 66, 639–660

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