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Business group persistence and institutional maturity: the role of management practices

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  • Zhixiang Liang
  • Michael Carney

Abstract

A widely accepted account of business group (BG) functioning suggests that this common corporate form will dismantle and restructure with the progressive maturity of market-supporting institutions. However, even in mature institutional settings, BGs appear to persists and thrive. We hypothesize that BG persistence arises from an evolving competitive advantage because their competitive advantages with certain types of management practices do not decay with institutional development. We test our hypothesis with data assembled in the World Bank Enterprise Surveys (WBES). Empirical results show that several bundles of management practice differentiate BG affiliates and independent firms in the early phase of development but become less prominent at later stages. However, some of the differences in management practice bundles disappear, but others continue to differentiate independent firms and group affiliates in mature institutional jurisdictions.

Suggested Citation

  • Zhixiang Liang & Michael Carney, 2020. "Business group persistence and institutional maturity: the role of management practices," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(6), pages 1483-1503.
    • Handle: RePEc:oup:indcch:v:29:y:2020:i:6:p:1483-1503.
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    File URL: http://hdl.handle.net/10.1093/icc/dtaa028
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    Cited by:

    1. Ki‐Hoon Lee & Donghoon Shin & Minwoo Lee, 2023. "Business group affiliation and corporate sustainability performance in emerging economies: Evidence from South Korea," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4503-4518, November.
    2. Vivien Lefebvre, 2023. "Business group affiliation in resource-scarce locations," Journal of Organization Design, Springer;Organizational Design Community, vol. 12(3), pages 121-140, September.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

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