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Under what institutional conditions do business groups enhance innovation performance?

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  • Wang, Chengqi
  • Yi, Jingtao
  • Kafouros, Mario
  • Yan, Yanni

Abstract

This study examines the institutional mechanisms through which business groups impact innovation in emerging markets. Rather than merely viewing groups as the result of a weak institutional environment, this study proposes that there are complementary elements between groups and institutions, enabling groups to benefit from interactions with their institutional environment. Evidence from a large sample of Chinese firms indicates that the effects of groups on innovation are pronounced when the group is affiliated to a higher level government agency and when the level of region-specific marketization is higher. The findings point to the context-dependent nature of the innovation and the existence of both substitution and complementary effects between business groups and institutions.

Suggested Citation

  • Wang, Chengqi & Yi, Jingtao & Kafouros, Mario & Yan, Yanni, 2015. "Under what institutional conditions do business groups enhance innovation performance?," Journal of Business Research, Elsevier, vol. 68(3), pages 694-702.
    • Handle: RePEc:eee:jbrese:v:68:y:2015:i:3:p:694-702
    DOI: 10.1016/j.jbusres.2014.08.002
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