Effect of Business Group Heterogeneity on New Venture Creation: Evidence from India

This paper investigates the impact of BG heterogeneity on new venture creation (NVC). NVC is an important strategic choice of generic growth through internal resources, adopted by BG affiliated firms. Existing research has suggested that BG affiliated firms would have a positive association with entrepreneurial orientation owing to their long term orientation (Lumpkin, Brigham, and Moss, 2010; Naldi et al., 2007). However there is a lack of studies that have looked at the impact of heterogeneity within and among BG affiliated firms on such strategic choices. We argue here that the ease of NVC increases with bigger BGs, due to better internal resource provision, of alternatives to external factor markets. In particular powerful firms within the BGs, have greater access to these internal resources.