A temporal study of diversification, group affiliation and performance among Indian manufacturers

Barbara S. Pécherot Petitt, Kannan Ramaswamy, Mingfang Li

Research output: Contribution to conferencePaper

3 Scopus citations

Abstract

Building on the recent research about the role of business groups in remedying market failures, this paper examined the impact of diversification and group affiliation on firm performance. Set in the Indian context, it compares the influence of diversification, group affiliation and their interaction on firm performance before (1988) and after (1999) the country introduced dramatic market reforms (1991). Results show that in the pre-reform period while group affiliated diversifiers captured performance benefits, performance of unaffiliated diversifiers was negatively impacted. This suggests that the group structure exerted an important moderating effect on the diversification performance relationship. In the post-reform period marked by a decrease in market failures and an enhanced institutional infrastructure, the positive effect of group affiliation was absent. This underscores the central intermediation role that groups play in mitigating market failures is not as valuable in contexts where the incidence of such failure is low.

Original languageEnglish (US)
StatePublished - Dec 1 2005
Externally publishedYes
Event65th Annual Meeting of the Academy of Management, AOM 2005 - Honolulu, HI, United States
Duration: Aug 5 2005Aug 10 2005

Other

Other65th Annual Meeting of the Academy of Management, AOM 2005
CountryUnited States
CityHonolulu, HI
Period8/5/058/10/05

Keywords

  • Diversification
  • Group affiliation
  • Performance

ASJC Scopus subject areas

  • Information Systems and Management

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    Pécherot Petitt, B. S., Ramaswamy, K., & Li, M. (2005). A temporal study of diversification, group affiliation and performance among Indian manufacturers. Paper presented at 65th Annual Meeting of the Academy of Management, AOM 2005, Honolulu, HI, United States.