TY - JOUR
T1 - Does business group affiliation encourage R&D activities? Evidence from India
AU - Komera, Surenderrao
AU - Jijo Lukose, P. J.
AU - Sasidharan, Subash
N1 - Funding Information:
Institute for Financial Management and Research (IFMR), No. 5655, Central Expressway, Sector 24, Satyavedu, Chittoor (Dist), Sri City, Andhra Pradesh 517 541, India
Funding Information:
We are grateful to two anonymous referees, Senior Editor Professor Anil Nair, and Professors T. N. Srinivasan and Satish Krishnan for insightful comments and suggestions. We thank seminar participants at IIM Kozhikode, IFMR Chennai, IISc Bangalore and participants of the annual Conference of Forum for Global Knowledge Sharing, Bangalore, 2014; Conference on Micro Evidence on Innovation and Development, New Delhi, 2015; and Academy of Management, Anaheim, 2016 for valuable comments. We take the complete responsibility for any remaining errors or omissions.
Publisher Copyright:
© 2017, Springer Science+Business Media, LLC.
PY - 2018/12/1
Y1 - 2018/12/1
N2 - The decision to undertake investment in innovative activities is an important strategic choice made by firms. This study investigates the relationship between business group (BG) affiliation and research & development (R&D) activities of Indian firms. Using an empirical approach that accounts for endogeneity and selection bias, we observe that BG affiliation has significant positive influence on the sample firms’ R&D activities. Employing various proxies for institutional development, we show that the effect of BG affiliation on R&D declines with the improvements in institutional and regulatory mechanisms. Further, this study explores the linkages between diversification strategies at the group level and R&D investments by firms affiliated with BGs. Results show that degree of related diversification is positively associated with the affiliates’ innovation efforts.
AB - The decision to undertake investment in innovative activities is an important strategic choice made by firms. This study investigates the relationship between business group (BG) affiliation and research & development (R&D) activities of Indian firms. Using an empirical approach that accounts for endogeneity and selection bias, we observe that BG affiliation has significant positive influence on the sample firms’ R&D activities. Employing various proxies for institutional development, we show that the effect of BG affiliation on R&D declines with the improvements in institutional and regulatory mechanisms. Further, this study explores the linkages between diversification strategies at the group level and R&D investments by firms affiliated with BGs. Results show that degree of related diversification is positively associated with the affiliates’ innovation efforts.
UR - https://www.scopus.com/pages/publications/85025811641
UR - https://www.scopus.com/pages/publications/85025811641#tab=citedBy
U2 - 10.1007/s10490-017-9530-3
DO - 10.1007/s10490-017-9530-3
M3 - Article
AN - SCOPUS:85025811641
SN - 0217-4561
VL - 35
SP - 887
EP - 917
JO - Asia Pacific Journal of Management
JF - Asia Pacific Journal of Management
IS - 4
ER -