Economic reforms, business groups and changing pattern of distribution of profitability across corporate firms in India: a semi-parametric analysis
This article applies the semi-parametric method to analyse the effects of economic reforms and some other factors on changes in the distribution of profitability of corporate firms in India. Comparing the two post-reform years (1994 and 2010) with the pre-reform year (1990), we observe a rightward shift in the distribution of profitability implying an across-the board increases in profitability of all firms after reforms. Two factors that explain the change are changes in interaction between capital structure and business group-affiliation, and changes in other firm characteristics such as size, age, growth opportunities and market share, which played the major role in explaining the changes in distribution of profitability of firms measured in terms of Tobin's q as well as Return On Assets (ROA). Two firm characteristics, namely size and market share, played a major role in explaining the changes in distribution of profitability of firms measured in terms of ROA but not in terms of Tobin's q . Our most important finding is that, profitability has increased both in the business group-affiliated firms and the stand-alone firms. Thus, our findings infer that, encouraging business group-affiliation is not necessarily a remedy to improve firm performance in an emerging market like India.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 23 (2013)
Issue (Month): 7 (April)
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAFE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAFE20|
When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:23:y:2013:i:7:p:589-602. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst)
If references are entirely missing, you can add them using this form.