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When does it make sense to focus business portfolios? A study of business group responses to institutional change in India

When does it make sense to focus business portfolios? A study of business group responses to... PurposeThis paper aims to report the findings from a longitudinal study of Indian business groups responding to the pro-market reforms that the government had initiated. It explores their diversification choices at the group level and the group performance consequences of these choices during a period of institutional changes (1990-2008).Design/methodology/approachOrdinary least squares regressions were used to analyze data spanning the 1988-2008 study period for 98 Indian business groups.FindingsResults show that business groups that focused their portfolios in the early stages of institutional reforms tended to perform worse than their counterparts that did not do so. However, as market reforms became more established, business groups that made the transition from an unfocused to a more focused portfolio experienced superior performance consequences.Originality/valueThe findings underscore the temporal dimension of focusing and suggest that both changing strategy by refocusing business portfolio too early or waiting too long to refocus can hurt performance outcomes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Asia Business Studies Emerald Publishing

When does it make sense to focus business portfolios? A study of business group responses to institutional change in India

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References (77)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1558-7894
DOI
10.1108/JABS-09-2016-0124
Publisher site
See Article on Publisher Site

Abstract

PurposeThis paper aims to report the findings from a longitudinal study of Indian business groups responding to the pro-market reforms that the government had initiated. It explores their diversification choices at the group level and the group performance consequences of these choices during a period of institutional changes (1990-2008).Design/methodology/approachOrdinary least squares regressions were used to analyze data spanning the 1988-2008 study period for 98 Indian business groups.FindingsResults show that business groups that focused their portfolios in the early stages of institutional reforms tended to perform worse than their counterparts that did not do so. However, as market reforms became more established, business groups that made the transition from an unfocused to a more focused portfolio experienced superior performance consequences.Originality/valueThe findings underscore the temporal dimension of focusing and suggest that both changing strategy by refocusing business portfolio too early or waiting too long to refocus can hurt performance outcomes.

Journal

Journal of Asia Business StudiesEmerald Publishing

Published: Dec 12, 2017

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