The Influence of Family Business Group on New Venture Creation: Evidence from India

Generic internal expansion through new venture creation is an important source of growth for family firms. We look at a unique type of family firms commonly found in emerging markets known as family business groups (FBGs) and investigate whether they are associated with a higher intensity of new venture creation compared to multinationals or domestic stand-alone private firms. We also explore some of the factors that may account for heterogeneity in new venture creation among these FBGs. Using a database of 16455 new projects initiated by 1659 firm within a 288 year period from 1988 to 2015, we find that FBG firms on average have higher positive impact on new venture creation. We also found heterogeneity among the FBG firms on the extent of their involvement in new venture creation. This heterogeneity was attributed to the resources commanded by the FBG.