Abstract
This paper investigates whether small business groups (SBGs) represent an organizational strategy that promotes growth. We explore empirically this issue using a unique data set on French small businesses ownership. We investigate whether SBGs represent an efficient response to market imperfections faced by small businesses. We explore two alternative hypotheses. First, SBGs may promote growth because SBG internal capital markets increase capital allocation efficiency. Second, SBGs may use their internal capital market for mutual insurance, which improves their access to external financing, and ultimately favor their dynamism. Our results show that grouping small businesses promotes small businesses development, because SBGs improve capital allocation. Finally, accounting for SBG diversification strategies does not affect the results.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
