Parenting among Business Groups: An Emerging Market’s Perspective

Working Papers
Bang, Nupur Pavan.,Ray, Sougata., Ramachandran, Kavil. "Parenting among Business Groups: An Emerging Market’s Perspective"
Abstract:
This paper explores the heterogeneity among family businesses by demarcating business group affiliated family firms from standalone family firms. Advantages associated with superior parenting by the promoting family of business group affiliated firms have been linked with the corporate strategy literature to explain their superior performance in an emerging market. Two proxies have been used to measure the extent of parenting namely, firm leadership by a family member and promoting family’s shareholding in the group affiliate company. The study has been conducted in the Indian economic context using a dataset consisting of 3,728 listed companies. Results show that business group affiliation has a positive impact on financial performance. Also, superior parenting realized by non-family firm leadership and higher promoter shareholding leads to superior financial performance among family business group firms as compared to standalone family firms.