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Business group affiliation as institutional linkages in China’s emerging economy: A focus on organizational traits and institutional conditions

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Abstract

We conceptualize business group affiliation as institutional linkages by integrating the resource-based view and institutional perspective to examine its direct and moderating effects on firm value in emerging economies. In a sample of 1233 Chinese listed companies, we find that while business group affiliation has mixed direct effects, it moderates the effects of organizational traits and institutional conditions on firm value. Specifically, group affiliation aggravates old firms’ “liability of oldness,” but helps mitigate large firms’ “liability of bigness.” Besides, business group affiliation can reduce the liabilities that institutional voids bring about, as evidenced in its moderating effects on the relationship between regional under-development/industrial restriction and firm value. Our findings point to the moderating effects of business group affiliation in emerging economies.

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Acknowledgements

We would like to thank APJM Senior Editor, Professor Michael Carney, and an anonymous reviewer for valuable comments in the review process. The authors acknowledge the support of grants from the Research Grants Council of the Hong Kong Special Administrative Region (No. 14501714 and No. 14504715) and the National Natural Science Foundation of China (No. 71402097).

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  1. Department of Management, Chinese University of Hong Kong, Sha Tin, Hong Kong

    Xufei Ma

  2. Department of Management and Marketing, The University of Melbourne, Melbourne, Australia

    Jane Wenzhen Lu

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Ma, X., Lu, J.W. Business group affiliation as institutional linkages in China’s emerging economy: A focus on organizational traits and institutional conditions. Asia Pac J Manag 34, 675–697 (2017). https://doi.org/10.1007/s10490-017-9517-0

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