The Impact of Internal Coupling Structure and Environmental Scarcity on Business Group Performance 公开

Abstract

A unique feature of business groups is that firms that are legally independent are bound together through various coupling ties. The role of internal coupling structure in business groups is a central concern in the business group literature. Yet we have an incomplete understanding of the coupling effects on the performance of business groups. Previous studies present conflicting arguments and provide mixed evidence on the topic, and most studies focus on the performance of affiliated firms, while little is known about group-level performance. This dissertation investigates how the extent of coupling among affiliated firms in a group affects their performance and that of business groups. Coupling creates interdependence among group firms and facilitates supports within groups. Moreover, coupling buffers group firms from environmental selection so that coupled groups sustain weak firms that would have failed otherwise. Such mutual assistance and protection within tightly coupled groups are likely to increase group firms' survival chances, especially in resource-scarce environments, and stabilize firm profitability over time. However, such interdependence is a double-edged sword because tight coupling compounds risk within groups. Protecting weak firms also makes the whole group vulnerable to environmental selection. Therefore, tight coupling is likely to increase group failure rates. Longitudinal analyses of 15,307 affiliated firms and 5,850 Korean business groups over a 20-year period, 1988-2007, support my predictions. Tight coupling among affiliated firms in a group through corporate governance (family ownership and intragroup shareholdings) and internal transactions decreases firm failure rate and increases group failure rate, especially in scarce environments. Also, tight coupling through corporate governance and internal transactions reduces the variance of firm profitability over time.

Table of Contents

CHAPTER 1: INTRODUCTION ………………………………………………………………………..…… 1 Types of Coupling …………………………………………………………………………………………………… 2 Coupling through governance …………………………………………………………………………3 Coupling through internal trades …………………………………………………………………… 5 Why Coupled Together? …………………………………………………………………………………………. 7 Unclear Effects of Internal Coupling Structure on Business Groups ………………………… 10 Dissertation Overview ………………………………………………………………………………………………14 CHAPTER 2: BEING TIGHTLY COUPLED: INTERNAL COUPLING STRUCTURE, ENVIRONMENTAL SCARCITY, AND THE PERFORMANCE OF AFFILIATED FIRMS IN BUSINESS GROUPS Introduction ………………………………………………………………………………………………………… 16 Internal Coupling Structure and the Performance of Group Affiliated Firms ………… 19 Moderating Effect of Environmental Scarcity ……………………………………………. 22 Types of Coupling ……………………………………………………………………………………… 24 Method …………………………………………………………………………………………………………………… 29 Context: South Korea …………………………………………………………………………………. 29 Data sources ……………………………………………………………………………………………….. 31 Sample ………………………………………………………………………………………………………. 33 Dependent Variables ………………………………………………………………………………….. 34 Independent Variables ………………………………………………………………………………… 35 Moderating Variable ………………………………………………………………………………….. 37 Estimation …………………………………………………………………………………………………………….. 38 Estimation models of firm failure rate ………………………………………………………… 38 Estimation models of the variance of firm profitability ……………………………… 43 Results …………………………………………………………………………………………………………………… 45 Discussion and Conclusions …………………………………………………………………………………… 50 CHAPTER 3: DIVIDED WE STAND, UNITED WE FALL: INTERNAL COUPLING STRUCTURE, ENVIRONMENTAL SCARCITY, AND BUSINESS GROUP FAILURE Introduction …………………………………………………………………………………………………………… 54 Effects of Internal Coupling Structure on Business Group Failure …………………………. 57 Moderating Effect of Environmental Scarcity ……………………………………………. 59 Types of Coupling ……………………………………………………………………………………… 61 Methods ………………………………………………………………………………………………………………… 64 Context, Data Sources, and Sample …………………………………………………………… 64 Analysis Model and Dependent Variable ……………………………………………………. 66 Independent Variables ………………………………………………………………………………… 69 Moderating Variable …………………………………………………………………………………. 70 Control Variables ………………………………………………………………………………………. 70 Results …………………………………………………………………………………………………………………… 71 Robustness check ………………………………………………………………………………………. 75 Discussion and Conclusions …………………………………………………………………………………… 78 References ……………………………………………………………………………………………………………… 82

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School	Laney Graduate School
Department	Business
Degree	PhD
Submission	Dissertation
Language	English
Research Field	Business Administration, Management
关键词	Internal coupling structure Environmental scarcity Business group Survival performance
Committee Chair / Thesis Advisor	Swaminathan, Anand, Emory University
Committee Members	Negro, Giacomo, Emory University Rider, Chris, Emory University

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