Abstract
By drawing a theoretical distinction between the persistence of superior
and poor performance, we reconcile the conflicting predictions of
the 'revisionist' and accepted views on the persistence of firm performance
in emerging economies. Using a sample of manufacturing firms in the
United States and India, we show that superior firm performance in
emerging economies persists only as much as developed economies in
line with the revisionist argument. We also provide evidence consistent
with the accepted view that poor firm performance persists longer
in emerging economies compared to developed economies. Further exploration
of the latter shows that, contrary to predictions of extant theories,
firms in emerging economies that are affiliated with an MNC or a
business group have a greater persistence of poor performance than
firms that are unaffiliated with these intermediate governance structures,
and hence would be better off operating at arm's length. Copyright
© 2005 John Wiley & Sons, Ltd.
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