Abstract
In this study, we try to find out whether group-affiliated firms perform better than the stand-alone firms in the post-reform period. Our study is based on the 14,274 numbers of BSE-listed manufacturing firms. Using dynamic panel data regression technique, we find that group-affiliated firms outperform the stand-alone firms. In order to find the factors responsible for better performance of affiliated firms, we again apply dynamic panel data regression technique. But more importantly, since we are interested to examine whether the impact of explanatory variables on firm performance differs between top performing and bottom-performing firms, we apply panel quantile regression method. However, the study finds that ownership opacity as well as internal financial capital, both are responsible for improved performance of group-affiliated firms. This refutes institutional void theory. The findings are analyzed from the perspectives of Resource-Based View, Resource Dependency theory and agency theory.
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Mukhopadhyay, J. (2023). Differences in the Performance of Group-Affiliated and Stand-Alone Firms. In: Chakraborty, A., Chakraborty, I. (eds) Indian Business Groups and Other Corporations. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-99-5041-6_8
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