Ownership identity, strategy and performance:business group affiliates versus independent firms in India

We consider whether the impact of entrepreneurial orientation on business performance is moderated by the company affiliation with business groups. Within business groups, we explore the trade-off between inter-firm insurance that enables risk-taking, and inefficient resource allocation. Risk-taking in group affiliated firms leads to higher performance, compared to independent firms, but the impact of proactivity is attenuated. Utilizing Indian data, we show that risk-taking may undermine rather than improve business performance, but this effect is not present in business groups. Proactivity enhances performance, but less so in business groups. Firms can also enhance performance by technological knowledge acquisition, but these effects are not significantly different for various ownership categories

Better governance matters optimal privatization policy

The quality of corporate governance is influential to operating efficiency of a public firm and thereby affects the government’s privatization policies. Within a mixed duopoly market, this paper considers corporatization and related corporate governance improving in economic sense to show that the effects of public firm’s governance enhancement can be extracted out from the effects of privatization. More importantly, the optimal privatization policy should be a flexible instrument hinging on the extent of governance improvement. Scenarios with a less efficient or an equally efficient public firm are considered and the result holds in both scenarios. Hence policy implications apply.</p