Abstract

http://ssrn.com/abstract=167589
 
 

Citations



 


 



Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups


Tarun Khanna


Harvard University - Strategy Unit

Krishna Palepu


Harvard University - Harvard Business School; Harvard University - David Rockefeller Center for Latin American Research; Harvard Business Review; NBER; International Academy of Management


Journal of Finance

Abstract:     
Emerging markets like India have poorly functioning institutions, leading to severe agency and information problems. Business groups in these markets have the potential to offer benefits to member firms, but they also have potential to destroy value. We analyze the performance of affiliates of diversified Indian business groups relative to unaffiliated firms. We find that accounting and stock market measures of firm performance initially decline with group diversification and subsequently increase once group diversification exceeds a certain level. Stock market measures suggest that, unlike U.S. conglomerates' lines of business, and similar to the affiliates of U.S. LBO associations, affiliates of the most diversified business groups outperform unaffiliated firms.

JEL Classification: G34

Accepted Paper Series


Not Available For Download

Date posted: July 14, 1999  

Suggested Citation

Khanna, Tarun and Palepu, Krishna, Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups. Journal of Finance. Available at SSRN: http://ssrn.com/abstract=167589

Contact Information

Tarun Khanna (Contact Author)
Harvard University - Strategy Unit ( email )
Harvard Business School
Boston, MA 02163
United States
617-495-6038 (Phone)
617-495-0355 (Fax)
Krishna Palepu
Harvard University - Harvard Business School ( email )
Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-495-6759 (Phone)
617-496-7363 (Fax)
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=pub&facId=6527
Harvard University - David Rockefeller Center for Latin American Research ( email )
1730 Cambridge St.
Cambridge, MA 02138
United States
HOME PAGE: http://www.drclas.harvard.edu/faculty/directory/professors/view/150
Harvard Business Review ( email )
Boston, MA
United States
HOME PAGE: http://hbr.org/authors/palepu
NBER ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
HOME PAGE: http://www.nber.org/people/krishna_palepu
International Academy of Management ( email )
Avenida Pearson 21
Barcelona, 08034
Spain
HOME PAGE: http://theiam.ws/?person=palepu-krishna
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