The Evolution of Concentrated Ownership in India Broad patterns and a History of the Indian Software Industry
AbstractAs in many countries (Canada, France, Germany, Japan, Italy, Sweden), concentrated ownership is a ubiquitous feature of the Indian private sector over the past seven decades. Yet, unlike in most countries, the identity of the primary families responsible for the concentrated ownership changes dramatically over time, perhaps even more than it does in the U.S. during the same time period. It does not appear that concentrated ownership in India is entirely associated with the ills that the literature has recently ascribed to concentrated ownership in emerging markets. If the concentrated owners are not exclusively, or even primarily, engaged in rent-seeking and entry-deterring behavior, concentrated ownership may not be inimical to competition. Indeed, as a response to competition, we argue that at least some Indian families the concentrated owners in question have consistently tried to use their business group structures to launch new ventures. In the process they have either failed hence the turnover in identity or reinvented themselves. Thus concentrated ownership is a result, rather than a cause, of inefficiencies in capital markets. Even in the low capital-intensity, relatively unregulated setting of the Indian software industry, we find that concentrated ownership persists in a privately successful and socially useful way. Since this setting is the least hospitable to the existence of concentrated ownership, we interpret our findings as a lower bound on the persistence of concentrated ownership in the economy at large.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10613.
Date of creation: Jul 2004
Date of revision:
Note: CF IO
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- N85 - Economic History - - Micro-Business History - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-18 (All new papers)
- NEP-CWA-2004-07-18 (Central & Western Asia)
- NEP-HIS-2004-07-18 (Business, Economic & Financial History)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Suma S. Athreye, 2005. "The Indian software industry and its evolving service capability," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 393-418, June.
- Ghemawat, Pankaj & Khanna, Tarun, 1998. "The Nature of Diversified Business Groups: A Research Design and Two Case Studies," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 35-61, March.
- Arora, Ashish & Athreye, Suma, 2001.
"The Software Industry and India's Economic Development,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Arora, Ashish & Athreye, Suma, 2002. "The software industry and India's economic development," Information Economics and Policy, Elsevier, vol. 14(2), pages 253-273, June.
- Marianne Bertrand & Paras Mehta & Sendhil Mullainathan, 2002.
"Ferreting Out Tunneling: An Application To Indian Business Groups,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(1), pages 121-148, February.
- Marianne Bertrand & Paras Mehta & Sendhil Mullainathan, 2000. "Ferreting Out Tunneling: An Application to Indian Business Groups," NBER Working Papers 7952, National Bureau of Economic Research, Inc.
- Tarun Khanna & Krishna G Palepu, 2004. "Globalization and convergence in corporate governance: evidence from Infosys and the Indian software industry," Journal of International Business Studies, Palgrave Macmillan, vol. 35(6), pages 484-507, November.
- Abhijit Banerjee & Esther Duflo, 1999.
"Reputation Effects and the Limits of Contracting: A Study of the Indian Software Industry,"
99-14, Massachusetts Institute of Technology (MIT), Department of Economics.
- Abhijit V. Banerjee & Esther Duflo, 2000. "Reputation Effects And The Limits Of Contracting: A Study Of The Indian Software Industry," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 989-1017, August.
- Leff, Nathaniel H, 1978. "Industrial Organization and Entrepreneurship in the Developing Countries: The Economic Groups," Economic Development and Cultural Change, University of Chicago Press, vol. 26(4), pages 661-75, July.
- D'Costa, Anthony P., 2006. "Exports, university-industry linkages, and innovation challenges in Bangalore, India," Policy Research Working Paper Series 3887, The World Bank.
- Randall Morck, 2005.
"How to Eliminate Pyramidal Business Groups The Double Taxation of Inter-corporate Dividends and other Incisive Uses of Tax Policy,"
in: Tax Policy and the Economy, Volume 19, pages 135-179
National Bureau of Economic Research, Inc.
- Morck, Randall, 2006. "How to Eliminate Pyramidal Business Groups: The Double Taxation of Inter-corporate Dividends and other Incisive Uses of Tax Policy," CEI Working Paper Series 2005-15, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- Randall Morck, 2004. "How to Eliminate Pyramidal Business Groups - The Double Taxation of Inter-Corporate Dividends and Other Incisive Uses of Tax Policy," NBER Working Papers 10944, National Bureau of Economic Research, Inc.
- Pal, Sarmistha & Ghosh, Sugata, 2008.
"The Elite and the Marginalised: An Analysis of Public Spending on Mass Education in the Indian States,"
IZA Discussion Papers
3707, Institute for the Study of Labor (IZA).
- Sarmistha Pal & Sugata Ghosh, 2008. "The Elite and the Marginalised: an Analysis of Public Spending on Mass Education in the Indian States," CEDI Discussion Paper Series 08-15, Centre for Economic Development and Institutions(CEDI), Brunel University.
- Aldo Musacchio, 2010. "Law and Finance c. 1900," NBER Working Papers 16216, National Bureau of Economic Research, Inc.
- Chari, Anusha & Gupta, Nandini, 2008. "Incumbents and protectionism: The political economy of foreign entry liberalization," Journal of Financial Economics, Elsevier, vol. 88(3), pages 633-656, June.
- L. Alan Winters & Shahid Yusuf, 2007. "Dancing with the Giants: China, India, and the Global Economy," World Bank Publications, The World Bank, number 6632, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.