International Diversification, Business Group Affiliation and Firm Performance: Empirical Evidence from India

15 Pages Posted: 12 May 2009

See all articles by Ajai Gaur

Ajai Gaur

Rutgers Business School - Newark and New Brunswick

Vikas Kumar

The University of Sydney Business School

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Abstract

We investigate the impact of business group affiliation on the relationship between international diversification and firm performance for emerging economy firms. We develop the theoretical arguments based on an integration of the literature on international diversification with the institutional theory perspective. We argue for a U-shaped relationship between international diversification and firm performance, and suggest that a firm's affiliation to a business group moderates the relationship between international diversification and firm performance. Based on a sample of Indian firms, we find that firm performance is positively related to the degree of internationalization, while business group affiliation reduces the positive effect of internationalization on firm performance.

Suggested Citation

Gaur, Ajai S. and Kumar, Vikas, International Diversification, Business Group Affiliation and Firm Performance: Empirical Evidence from India. British Journal of Management, Vol. 20, Issue 2, pp. 172-186, June 2009, Available at SSRN: https://ssrn.com/abstract=1401651 or http://dx.doi.org/10.1111/j.1467-8551.2007.00558.x

Ajai S. Gaur (Contact Author)

Rutgers Business School - Newark and New Brunswick ( email )

Newark, NJ
United States

Vikas Kumar

The University of Sydney Business School ( email )

Storie Dixson Building H10
The University of Sydney
Sydney, NSW 2006
Australia
+ 61 2 9351 6438 (Phone)
+ 61 2 9036 5378 (Fax)

HOME PAGE: http://www.econ.usyd.edu.au/staff/vikask

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