EconPapers    
Economics at your fingertips  
 

Innovation in Business Groups

Sharon Belenzon and Tomer Berkovitz ()

No 368, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Using novel data on European firms, this paper examines the effect of business group affiliation on innovation. We find that business groups foster the scale and novelty of corporate innovation. Group affiliation is particularly important in industries that rely more on external finance and have a higher degree of information asymmetry. We also find that the innovation of affiliates is less sensitive to operating cash flows. We interpret our results as supporting the `bright side` of business group internal capital markets and explain how legal boundaries between group affiliates mitigate the inefficiencies found in internal capital markets of US conglomerates.

Keywords: Business Groups; Innovation; Internal Capital Markets (search for similar items in EconPapers)
JEL-codes: G34 L22 L26 O32 (search for similar items in EconPapers)
Date: 2007-10-01
New Economics Papers: this item is included in nep-com and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:62d249ae-c614-486c-adb3-5b5e920364e6 (text/html)

Related works:
Journal Article: Innovation in Business Groups (2010) Downloads
Working Paper: Innovation in Business Groups (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:368

Access Statistics for this paper

More papers in Economics Series Working Papers from University of Oxford, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Anne Pouliquen ( this e-mail address is bad, please contact ).

 
Page updated 2024-06-13
Handle: RePEc:oxf:wpaper:368