Does business group affiliation help firms achieve superior performance during industrial downturns? An empirical examination

Bamiatzi, V., Cavusgil, S. T., Jabbour, L. and Sinkovics, R. R. (2014) Does business group affiliation help firms achieve superior performance during industrial downturns? An empirical examination. International Business Review, 23(1), pp. 195-211. (doi: 10.1016/j.ibusrev.2013.04.003)

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Does affiliation with a business group enhance a firm's performance? What is the potential effect of this affiliation especially in declining economic periods? The literature provides contradictory results on this proposition. In this study, the authors explore the role of business group affiliation as a firm-specific factor and its impact in different environments, adding to our understanding of the firm-growth phenomenon. The empirical context is a large sample of firms registered in the United Kingdom, drawn from the FAME database. The analysis provides evidence for significant impact of business group affiliations on firm growth, especially during adverse economic conditions. However, the business group–firm growth relationship is moderated by firm-specific characteristics (e.g. firm size), and group specific characteristics (e.g. type of ownership and country of origin). Regarding the latter, it is specifically revealed that the impact of group affiliation is not uniform across all countries, a possibility that has been ignored in the international business literature. Among its contributions, this research introduces a novel typology of firms in growing and declining industries. The proposed typology enables us to advance propositions with respect to varying trajectories of business affiliations for firms of different size and nationality/region of origin of business groups.

Item Type:Articles
Keywords:Affiliation, Business groups, Declining industries, Firm performance, Over-performers, Small firms
Glasgow Author(s) Enlighten ID:Sinkovics, Professor Rudolf
Authors: Bamiatzi, V., Cavusgil, S. T., Jabbour, L., and Sinkovics, R. R.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:International Business Review
Published Online:30 April 2013

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