Business groups and profit redistribution: A boon or bane for firms?

Citation

George R & Kabir R (2008) Business groups and profit redistribution: A boon or bane for firms?. Journal of Business Research, 61 (9), pp. 1004-1014. https://doi.org/10.1016/j.jbusres.2007.12.002

Abstract
This article examines the phenomenon of profit redistribution in Indian business groups and relates redistribution with the underperformance of group-affiliated firms relative to unaffiliated firms. The study also documents that profit redistribution is more pronounced in groups of large sizes and high levels of corporate control. The relative underperformance of affiliated firms persists even after controlling for other explanations such as corporate diversification and resource transfers to unlisted firms. The empirical results of the study lend support for the inefficient profit redistribution explanation of the “business group discount�. Copyright 2008 ElsevierCopyright of Journal of Business Research is the property of Elsevier Science Publishing Company, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Keywords
ABSTRACTS; ACCURACY; AFFILIATION; ALLOCATION; BUSINESS; business groups; BUSINESS planning; codes; Control; Copyright; CORPORATE governance; DIVERSIFICATION in industry; documents; email; empirical; explanation; financial; FINANCIAL management; FINANCIAL performance; firm; firms; governance; India; Industry; LEVEL; levels; Management; NUMBER; other; Performance; PLANNING; PROFIT; properties; Publishing; Research; RESOURCE allocation; RESOURCE-ALLOCATION; Science; SITES; Stirling; support; transfer; United Kingdom; universities; UNLISTED FIRMS

Journal
Journal of Business Research: Volume 61, Issue 9