Business groups in developing capital markets: Towards a complementarity perspective

Chittoor, R and Kale, P and Puranam, P (2014) Business groups in developing capital markets: Towards a complementarity perspective. Strategic Management Journal.

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Prior research suggests that business groups (BGs) in developing economies have emerged as alternatives to poorly developed economic institutions in these countries. In this paper, we argue that this does not imply they are always substitutes. Specifically, we consider the case of capital markets, a key economic institution: while the absence of well-developed capital markets may indeed have stimulated the emergence of business groups, we propose that BG affiliation and the scrutiny that maturing capital markets impose on firms that participate actively in them nevertheless can play a complementary role in influencing a firm's performance. We find support for our predictions in a novel longitudinal data set of Indian firms that contain both listed and unlisted BG affiliated as well as unaffiliated firms.

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
Chittoor, R
Item Type: Article
Uncontrolled Keywords: Business groups; Capital market efficiency; Institutional voids; Organizational structure
Subjects: Business and Management
Depositing User: LRC ISB
Date Deposited: 04 Nov 2014 06:43
Last Modified: 17 Feb 2019 09:26
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