Does group affiliation increase firm value for diversified groups? New evidence from Indian companies

Robert Lensink*, Remco van der Molen

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

12 Citations (Scopus)

Abstract

This article studies the impact of group affiliation on the performance of firms in India during 1996-2001, with the goal of determining whether the positive valuation effects of group affiliation depend on the degree of group diversification. The results from this study indicate that prior support for that hypothesis actually is fragile and highly influenced by extreme outliers. The authors also provide preliminary evidence for the hypothesis that group affiliation is particularly beneficial for firms that suffer financial constraints. (C) 2009 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)332-344
Number of pages13
JournalJournal of Empirical Finance
Volume17
Issue number3
DOIs
Publication statusPublished - Jun-2010

Keywords

  • Business groups
  • Diversification
  • Financing constraints
  • India
  • KOREAN BUSINESS GROUPS
  • EMERGING MARKETS
  • PERFORMANCE
  • STRATEGY

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