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Business groups and entrepreneurship in developing countries after reforms

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  • Chari, Murali D.R.
  • Dixit, Jaya

Abstract

Drawing from the literature on markets and market development we develop hypotheses on the startup and growth of formal business by business groups relative to independent entrepreneurs after reforms. We then test the hypotheses in a large sample of firms that were started up after reforms in one large developing country—India. Findings show that (a) the likelihood of formal business startup by business groups, relative to independent entrepreneurs, declines with market development following reforms, (b) the likelihood of formal business startup by business groups, relative to independent entrepreneurs, is greater in industries privatized by reforms and in industries with greater foreign firm presence, and (c) formal businesses started by business groups experience greater growth than formal businesses started by independent entrepreneurs.

Suggested Citation

  • Chari, Murali D.R. & Dixit, Jaya, 2015. "Business groups and entrepreneurship in developing countries after reforms," Journal of Business Research, Elsevier, vol. 68(6), pages 1359-1366.
    • Handle: RePEc:eee:jbrese:v:68:y:2015:i:6:p:1359-1366
    DOI: 10.1016/j.jbusres.2014.12.006
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    9. Frederick Kibon Changwony & Anthony Kwabena Kyiu, 2024. "Business strategies and corruption in small‐ and medium‐sized enterprises: The impact of business group affiliation, external auditing, and international standards certification," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 95-121, January.

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