The Performance Effects of Business Groups in Russia
S. Estrin, S. Poukliakova, and D. Shapiro. Journal of Management Studies, 46 (3):
393-420(2009)Estrin, Saul Poukliakova, Svetlana Shapiro, Daniel.
Abstract
This study analyses the impact of business group affiliation on firm
performance during a time when business groups are newly formed,
when the economic and institutional environment is changing, and
when group survival is uncertain. Based primarily on a transaction
cost approach, we develop two hypotheses, concerning profitability
and risk sharing (redistribution) respectively. The positive profitability
hypothesis proposes that company affiliation with a business group
directly and positively affects the profitability of each affiliate.
A positive direct effect emerges when each affiliate benefits from
access to group resources. The redistribution hypothesis considers
the simultaneous possibility that inter-affiliate transfers of resources
through internal markets are designed to redistribute profits among
group members. We argue that variance-reducing redistribution from
strong to weak group members is linked to group survival in times
of institutional change. Our empirical approach focuses on testing
these two linked hypotheses (and their alternatives) using a relatively
large, contemporary and time varying database of Russian firms. We
also develop a framework that distinguishes among the four possible
empirical outcomes associated with the hypotheses. Our results provide
unambiguous support for the case where the impact of group membership
on profitability is positive and redistribution is variance-reducing.
We term this outcome Business Group Robustness, and contrast it with
other possible empirical outcomes.
%0 Journal Article
%1 Estrin2009
%A Estrin, S.
%A Poukliakova, S.
%A Shapiro, D.
%D 2009
%J Journal of Management Studies
%K emergentes rusia
%N 3
%P 393-420
%T The Performance Effects of Business Groups in Russia
%V 46
%X This study analyses the impact of business group affiliation on firm
performance during a time when business groups are newly formed,
when the economic and institutional environment is changing, and
when group survival is uncertain. Based primarily on a transaction
cost approach, we develop two hypotheses, concerning profitability
and risk sharing (redistribution) respectively. The positive profitability
hypothesis proposes that company affiliation with a business group
directly and positively affects the profitability of each affiliate.
A positive direct effect emerges when each affiliate benefits from
access to group resources. The redistribution hypothesis considers
the simultaneous possibility that inter-affiliate transfers of resources
through internal markets are designed to redistribute profits among
group members. We argue that variance-reducing redistribution from
strong to weak group members is linked to group survival in times
of institutional change. Our empirical approach focuses on testing
these two linked hypotheses (and their alternatives) using a relatively
large, contemporary and time varying database of Russian firms. We
also develop a framework that distinguishes among the four possible
empirical outcomes associated with the hypotheses. Our results provide
unambiguous support for the case where the impact of group membership
on profitability is positive and redistribution is variance-reducing.
We term this outcome Business Group Robustness, and contrast it with
other possible empirical outcomes.
@article{Estrin2009,
abstract = {This study analyses the impact of business group affiliation on firm
performance during a time when business groups are newly formed,
when the economic and institutional environment is changing, and
when group survival is uncertain. Based primarily on a transaction
cost approach, we develop two hypotheses, concerning profitability
and risk sharing (redistribution) respectively. The positive profitability
hypothesis proposes that company affiliation with a business group
directly and positively affects the profitability of each affiliate.
A positive direct effect emerges when each affiliate benefits from
access to group resources. The redistribution hypothesis considers
the simultaneous possibility that inter-affiliate transfers of resources
through internal markets are designed to redistribute profits among
group members. We argue that variance-reducing redistribution from
strong to weak group members is linked to group survival in times
of institutional change. Our empirical approach focuses on testing
these two linked hypotheses (and their alternatives) using a relatively
large, contemporary and time varying database of Russian firms. We
also develop a framework that distinguishes among the four possible
empirical outcomes associated with the hypotheses. Our results provide
unambiguous support for the case where the impact of group membership
on profitability is positive and redistribution is variance-reducing.
We term this outcome Business Group Robustness, and contrast it with
other possible empirical outcomes.},
added-at = {2011-11-13T04:52:20.000+0100},
author = {Estrin, S. and Poukliakova, S. and Shapiro, D.},
biburl = {https://www.bibsonomy.org/bibtex/2678bd42598482decde0268a9be29c726/edwardyanquen},
interhash = {c1a3daad706bfbb809f8b13cbb30708e},
intrahash = {678bd42598482decde0268a9be29c726},
journal = {Journal of Management Studies},
keywords = {emergentes rusia},
note = {Estrin, Saul Poukliakova, Svetlana Shapiro, Daniel},
number = 3,
pages = {393-420},
timestamp = {2011-11-13T04:52:21.000+0100},
title = {The Performance Effects of Business Groups in Russia},
volume = 46,
year = 2009
}