Business group heterogeneity and the internationalization-performance relationship: Evidence from Indian business groups

Abstract

Business groups, the dominant organizational form in many Asian markets, have expanded their operations into international markets. We combine the resources-based view with the institutional perspective to highlight the costs and benefits of business groups� internationalization, rather than business groups� affiliated firms� internationalization, and consider how ownership heterogeneity among business groups influences the internationalization-performance relationship. Three ownership types�family, domestic financial institution, and foreign corporate�serve as distinguishing characteristics of business groups and potential moderators of this relationship. In a sample of 185 Indian business groups examined over more than a decade (2000�2010), we find that these three ownership types have a differential impact on the internationalization-performance relationship� depending on the level of internationalization of the business group. Specifically� we find that at lower levels of internationalization, family and foreign corporate ownership has a positive moderating effect whereas domestic financial institutional ownership has a negative moderating effect. Conversely� at higher levels of internationalization, family and foreign corporate ownership has a negative moderating effect, while domestic financial institutional ownership positively moderates the internationalization-performance relationship. � 2016, Springer Science+Business Media New York.