Corporate Expansion During Pro-Market Reforms in Emerging Markets: The Contingent Value of Group Affiliation and Diversification

38 Pages Posted: 15 Nov 2017

See all articles by Deeksha A. Singh

Deeksha A. Singh

Rutgers Business School - Camden; National University of Singapore (NUS)

Chinmay Pattnaik

The University of Sydney - Discipline of International Business

Ajai Gaur

Rutgers Business School - Newark and New Brunswick

Elif Ketencioglu

Vodafone (Australia)

Date Written: November 12, 2017

Abstract

This study examines how emerging economy firms pursue growth in the domestic market during pro-market reforms. Grounding in the literature on institutional perspective on strategic adaptation during institutional transition, we propose an inverted U-shaped relationship between pro-market reforms and firms’ pursuit of growth through new investments. However, the effect of pro-market reforms is likely to vary depending on organizational forms and prior logic of competition. More specifically, we propose that business group affiliation has a positive moderating effect, while prior diversification has a negative moderating effect on the relationship between pro-market reforms and corporate expansion through new investments. Our empirical findings based on a sample of 6,072 new investment projects undertaken by 3,028 companies in India during 1995-2014 provide robust empirical support for the hypothesized relationships.

Suggested Citation

Singh, Deeksha A. and Pattnaik, Chinmay and Gaur, Ajai S. and Ketencioglu, Elif, Corporate Expansion During Pro-Market Reforms in Emerging Markets: The Contingent Value of Group Affiliation and Diversification (November 12, 2017). Journal of Business Research, Vol. 82, 2018, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3069877

Deeksha A. Singh

Rutgers Business School - Camden ( email )

227 Penn Street
Camden, NJ 08102
United States

National University of Singapore (NUS) ( email )

Bukit Timah Road 469 G
Singapore, 117591
Singapore

Chinmay Pattnaik

The University of Sydney - Discipline of International Business ( email )

Sydney, 2006
Australia

Ajai S. Gaur (Contact Author)

Rutgers Business School - Newark and New Brunswick ( email )

Newark, NJ
United States

Elif Ketencioglu

Vodafone (Australia) ( email )

Level 7 40 Mount Street
North Sydney, 2060
Australia

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