IDEAS home Printed from https://ideas.repec.org/a/cup/maorev/v16y2020i2p261-291_3.html
   My bibliography  Save this article

Value Constraining or Value Enabling? The Impact of Business Group Affiliation on Post-Acquisition Performance by Emerging Market Firms

Author

Listed:
  • Popli, Manish
  • Ladkani, Radha Mukesh

Abstract

Literature has advanced two contrasting theoretical perspectives related to the governance structure of business groups: the ‘value-constraining’ perspective, which focuses on principal–principal agency conflict and organizational inertia theory, and the ‘value-enabling’ perspective, which emphasizes the role of business groups in mitigation of institutional voids. Building on these two competing lenses, we develop hypotheses to examine post-acquisition performance of affiliate firms relative to stand-alone firms. As our empirical context, we study 440 majority-stake, domestic and cross-border merger and acquisition deals closed by Indian firms during the period 2002–2013. The results imply that in emerging markets, despite concerns of organizational inertia and principal–principal agency issues, the value-enabling impact of group affiliation persists. We also examine the contextual impact of intergroup heterogeneity owing to group diversification on post-acquisition performance and find that greater group diversification leads to better performance for affiliate acquirers.

Suggested Citation

  • Popli, Manish & Ladkani, Radha Mukesh, 2020. "Value Constraining or Value Enabling? The Impact of Business Group Affiliation on Post-Acquisition Performance by Emerging Market Firms," Management and Organization Review, Cambridge University Press, vol. 16(2), pages 261-291, May.
    • Handle: RePEc:cup:maorev:v:16:y:2020:i:2:p:261-291_3
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1740877619000512/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Popli, Manish & Ahsan, Faisal Mohammad, 2024. "Springboarding and activity load: Constraints on managerial attention and dependency on advisory firms in cross-border acquisitions," Journal of International Management, Elsevier, vol. 30(2).
    2. Magdalena Rzemieniak & Joanna Wyrwisz & Katarzyn Toborek, 2021. "The Relationship between Consumers‘ Characteristics and the Expectations towards a Brand‘s Value," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 264-277.
    3. Raithatha, Mehul & Popli, Manish, 2022. "Persistence of past: Impact of historical institutions on corporate risk taking," Finance Research Letters, Elsevier, vol. 45(C).
    4. Popli, Manish & Raithatha, Mehul & Ahsan, Faisal Mohammad, 2021. "Signaling behavioral intent through better governance: A study of emerging market multinational enterprises," Journal of Business Research, Elsevier, vol. 135(C), pages 697-710.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:maorev:v:16:y:2020:i:2:p:261-291_3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/mor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.