Asia Pacific Journal of Management

, Volume 23, Issue 4, pp 419–437 | Cite as

Business groups and their types

  • Alvaro Cuervo-Cazurra


We clarify what business groups are and analyze their various types. We first distinguish business groups from other types of firm networks based on the strategic relationships among companies; business groups are defined as those networks that exhibit unrelated diversification under common ownership. We then separate business groups into three types based on their ownership: family-owned, widely-held, and state-owned. We argue that each type has different agency costs and diversification logics. As a result of these differences, their performance varies, with family-owned business groups outperforming widely-held ones, and these in turn outperforming state-owned business groups.


Business groups Diversification Family-ownership Theory of the firm 


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Copyright information

© Springer Science+Business Media, LLC 2006

Authors and Affiliations

  1. 1.Sonoco Department of International Business, Moore School of BusinessUniversity of South CarolinaColumbiaUSA

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