Effect Of Group Affiliation Research Articles

Business groups and firm-specific characteristics: influences on entrepreneurial orientation

PurposeThe purpose of this study is to investigate the impact of business group (BG) affiliation on affiliated firms' entrepreneurial orientation (EO). The authors further investigate the possible contingent factors affecting this relationship – the age of BGs and the affiliated firm’s external linkages (ratio of external to in-house interlocks) on the relationship in an emerging market context.Design/methodology/approachThe study employs a dynamic panel data framework using the system-generalized method of moments (Sys-GMM) on a sample of 670 NSE-listed Indian firms during the 2006–2019 period. EO is measured through content analysis of the letters to shareholders (LTS) issued by the companies between the period 2006 and 2019.FindingsBG affiliates have more EO than standalone firms, as affiliates can access group-wide resources and capabilities apart from firm-specific resources. Affiliates of older BG have less EO since they are more entrenched in the institutional settings of their BG. Affiliates with more external linkages of board members will have a higher level of EO, as such linkages would subside inertial tendencies by exposing them to novel sets of information, resources and strategic practices. Further, the negative effect of BG age on EO is countered by external linkages. Overall, the study shows that the effect of group affiliation is not uniform and is contingent on the factors we have theorized and tested.Originality/valueThe paper proposes the resource-based view and the institutional void theory as likely candidates for explaining the contribution of BGs towards the EO of its affiliates, especially in the context of emerging markets. The contingent role of BG age highlighted in the paper forewarns managers about the importance of establishing internal mechanisms to preserve the EO in affiliates. Our findings about the positive role played by external linkages of the board members provide one such mechanism that can be leveraged to enhance affiliated firm’s EO.

Does a white bear help you eat less? The impact of the inhibitory spillover effect on eating behaviour.

Overweight and obesity are global problems with negative physical, social, and psychological outcomes. Besides other factors, inhibitory control deficits contribute to weight gain and development of overweight. The inhibitory spillover effect (ISE) improves inhibitory control through transfer of inhibitory control capacity from one domain to an unrelated, second domain. For ISE to occur, one inhibitory control task is executed simultaneously with a second, non-control related task thereby increasing inhibitory control in this task. In this preregistered study, we tested the ISE induced through thought suppression in contrast to a neutral task in participants with normal weight and overweight (N=92). A simultaneously conducted bogus taste test served as outcome measure for food intake. We found neither an interaction effect between group affiliation and condition nor an effect of group affiliation. However, contrary to our expectations, we found higher food intake in participants with active ISE compared to the neutral task. This result might indicate rebound effects of applied thought suppression which led to the experience of loss of control and therefore undermined maintenance and function of the ISE. This main result was robust to all moderator variables. We elaborate further factors for the finding, theoretical implications, and future research directions.

Diversity, Dissent and Representation: Lessons From The First Minority Judge in the Israeli Supreme Court

This paper seeks to enrich existing empirical research on substantive representation in the judicial system by exploring a case study of the Honorable Justice (retired) Salim Joubran, the first ethnic-minority judge appointed to the Supreme Court of Israel. By employing a dual methodology of qualitative discourse analysis and dissenting quantitative studies, the study investigates when, why and how he dissented in controversial cases, which are defined as cases that resulted in non-unanimous votes. The study shows that a quantitative study on dissenting opinions of a minority judge alone did not provide comprehensive conclusions. The complementary qualitative discourse analysis shows that in cases that challenged state actions that impacted his social group, Joubran employed distinct strategies and reasoning that are akin to feminist judgments approach. Hence, the study adds to existing research on judicial diversity indicating that women and ethnic minorities judges not only share common challenges but might also operate similar reasoning strategies. In light of these insights, the study calls for employing the combined qualitative and quantitative methodology on examining judgments focusing on dissenting opinions of women and ethnic minority judges as it offers a complex understanding of substantive representation and provides answers regarding the socio-legal effects of group affiliation on judgments.

Effects of group affiliation on neural signatures of fairness norm violations in antisocial violent offenders

While norm-violating behavior in antisocial individuals has been widely studied, little is known about how these people react to unfair behavior directed towards them. Previous research yields inconclusive results with some evidence for rational and strategic behavior in antisocial individuals. Electrophysiological correlates as well as socio-contextual factors such as group affiliation that may inform decision making on fairness considerations have not been investigated in previous studies.This study compared fairness considerations of antisocial violent offenders (N = 25) and controls (N = 26) by using the Ultimatum Game where one player proposes a split of resources and the other player has to respond by accepting or declining the offer. Group affiliation of the proposer (in- vs. out-group) and fairness of offers (fair vs. unfair) were manipulated.We found no difference between groups regarding decision behavior. However, healthy participants showed an electrophysiological response to group affiliation, which was attenuated in the violent offender group.This data suggests intact understanding of social norms in antisocial violent offenders while electrophysiological response pattern may be linked to impaired emotional reactions to expectancy violations.

Business Group Affiliation, Ownership Structure, and the Cost of Debt

This paper examines the relation between business group affiliation and the cost of debt capital. The co-insurance effect associated with business groups can reduce the cost of debt, while the expropriation by controlling shareholders can raise the cost of debt. We find that firms affiliated with major Korean business groups (i.e., chaebols) enjoy a substantially lower cost of public debt than do independent firms, consistent with the co-insurance argument. We also find that the effect of group affiliation on the cost of debt is stronger for firms with poor credit quality and with opaque financial statements, and when the economy is in downturns. These findings are consistent with the notion that the value of co-insurance increases with the uncertainty about the future payoffs of debtholders. Our study highlights that the role of business groups is distinct from and incremental to the role of ownership structure in the debt market.

Effect of Group Affiliation on Investments: Evidence from the Global Economic Crisis*

This paper investigates the impact of business group structure on investment activities by group-affiliated companies. Using data on Korean business groups called chaebols we compare changes in investments across chaebol and control firms throughout the global economic crisis. To control for confounding effects, we applied an empirical strategy that identified a group of the most comparable control firms in terms of observables and eliminated the selection bias caused by unobservables. We found that during the global economic crisis, chaebol-affiliated firms increased investments, whereas control firms significantly decreased their investments. The investments of chaebol member firms were financed not through internal capital markets but through external capital markets. However, the relatively greater decreases in Tobin’s Q for chaebol firms suggest that investment efficiency of group-affiliated firms is worse than that of control firms.

NONE OF US IS AS LAZY AS ALL OF US

In this paper we apply theory and research from sociology and social psychology to the problem of collective information sharing and exchange on the internet. We investigate the relationships between pre-existing dispositions to be cautious towards others, the propensity to exert more or less effort as a function of group affiliation, and contribution towards a collective goal. We find that individuals with average or lower levels of general caution are more likely to contribute to a collective pool of information, providing support for Yamagishi's (2001) argument that less cautious individuals exhibit a type of social intelligence by engaging in risky but potentially rewarding social interactions. Consistent with the literature on social loafing, we find that abstract group affiliations have a negative effect on information sharing behaviour. However, the effect of group affiliation is mediated by one's level of general caution. We argue that pre-dispositions to engage in socially risky situations are a critical element of individuals’ decisions to contribute to online information sharing systems or not.

Effect of Group Affiliation, Ownership Structures, and New Entries on Efficiency: Lessons from the Japanese Life Insurance Industry after Deregulation

Deregulation and the succeeding changes, such as forming group affiliation, demutualization, and new entry from foreign countries, are widespread and worldwide phenomenon in the life insurance industry. This study examines impacts of the deregulation and the succeeding changes on efficiency of the Japanese life insurance industry using a Stochastic Input Distance Frontier Approach, a new version of Stochastic Frontier Analysis (SFA), which is the first application to an insurance industry. The main results are as follows. First, a group affiliated life insurer is more efficient than the others. Second, an efficiency difference between mutual and stock life insurers has been getting larger since deregulation. Third, there is not much difference of efficiency between foreign insurers and domestic insurers. We also find that efficiency of life insurers has decreased on average after deregulation.

Stock Market React to Foreign Investment: The Effects of Investment Purpose, Stock Market Characteristics, and Business Group Affiliation

This paper examines how the public announcement of foreign share acquisitions in listed companies affects the share prices of those companies. The dataset contains 422 public announcements of foreign share acquisitions in Korean listed companies over the period from March 2005 to June 2009. The empirical analysis builds upon the findings of previous studies, but also considers the moderating effects of three factors: the motivation of the foreign investor (management participation or pure investment); the characteristics of the stock exchange on which the domestic companies are listed; and the effects of group affiliation. Using event study methods, the abnormal returns are obtained and statistical tests are undertaken between the mean returns for the different sub-groups. A significant 21-day cumulative abnormal return of 1.1% is found for the total sample, and the statistical tests suggest that the factors investigated influence the size of the abnormal gains.

The effect of group affiliation on the risk-taking of Japanese firms

This article examines the role of keiretsu (i.e. business group) affiliation on the risk-taking of Japanese firms. We find that total risk, measured by firm-level stock price volatility, is not significantly affected by keiretsu membership. The reason is that affiliated firms are characterized by lower idiosyncratic risk along with higher systematic risk. However, idiosyncratic risk varies across business groups and appears to depend upon the firm's inclination towards its group. In contrast, the higher systematic risk of group affiliates is significant for each keiretsu and every degree of group inclination. Moreover, this result remains after adjusting risk for firm characteristics and industry effects. Hence, the consequence of group affiliation may more accurately be described by higher systematic risk. This result could reflect the weaker competitive position of keiretsu affiliates.

Does Group Affiliation Improve Firm Performance? The Case of Chinese State-Owned Firms

This paper examines, for a sample of 657 state-owned Chinese firms in 2005, whether group affiliation improves performance. By using a simple OLS regression, as well as propensity score matching, treatment effects and two-step instrumental variable methods, we find a robust positive effect of group affiliation, which suggests that state-owned firms in China may benefit from joining a business group.

A TEMPORAL STUDY OF DIVERSIFICATION, GROUP AFFILIATION AND PERFORMANCE AMONG INDIAN MANUFACTURERS.

Building on the recent research about the role of business groups in remedying market failures, this paper examined the impact of diversification and group affiliation on firm performance. Set in the Indian context, it compares the influence of diversification, group affiliation and their interaction on firm performance before (1988) and after (1999) the country introduced dramatic market reforms (1991). Results show that in the pre-reform period while group affiliated diversifiers captured performance benefits, performance of unaffiliated diversifiers was negatively impacted. This suggests that the group structure exerted an important moderating effect on the diversification performance relationship. In the post-reform period marked by a decrease in market failures and an enhanced institutional infrastructure, the positive effect of group affiliation was absent. This underscores the central intermediation role that groups play in mitigating market failures is not as valuable in contexts where the inciden...

Group Affiliation and Firm Risk: Evidence from Stock Returns on Indian Companies

This paper analyzes the effect of group affiliation on the riskiness of Indian companies. We show that the large difference in stock returns on group affiliates and on stand-alone companies cannot be explained by a standard multifactor model. However, the common variation in the returns on group company stocks suggests that there is a group affiliation factor in Indian stock returns. When we control for this additional factor, we find that about fifty percent of the underperformance of group companies can be explained by their lower risk. We also find evidence suggesting that the group affiliation factor is related to financial distress.

An Experimental Investigation of Self-Serving Biases in an Auditing Trust Game: The Effect of Group Affiliation

I report the results of an experiment designed to investigate the influence of noncredible communications and group affiliation on auditors' formation of self-serving bias. I find that manager-subjects use noncredible communications to induce auditors to develop an unwarranted trust of managers (i.e., a biased judgment). However, the bias is neutralized when auditor-subjects belong to groups that create social pressure to conform to group norms. Thus, my finding calls into question the Bazerman et al. (1997) conclusion that auditors cannot conduct impartial audits due to self-serving biases resulting from repeated interactions between auditors and their clients.

An Experimental Investigation of Self-Serving Biases in an Auditing Trust Game: The Effect of Group Affiliation

I report the results of an experiment designed to investigate the influence of noncredible communications and group affiliation on the formation of self-serving bias in an auditing trust game. I find that manager-subjects use noncredible communications (i.e., a message communicating their intent to commit low fraud levels without actually having to implement this fraud level) to induce a self-serving bias on the part of auditor-subjects. However, the self-serving bias is neutralized when auditor-subjects belong to groups that create social pressure to conform to group norms. My finding that group affiliation can undo self-serving bias calls into question the Bazerman et al. (1997) conclusion that auditors cannot be independent because of self-serving biases.

Estimating the performance effects of business groups in emerging markets

Business groups—confederations of legally independent firms—are ubiquitous in emerging economies, yet very little is known about their effects on the performance of affiliated firms. We conceive of business groups as responses to market failures and high transaction costs. In doing so, we develop hypotheses about the effects of group affiliation on firm profitability: affiliation could either boost or depress firm profitability, and members of a group are likely to earn rates of return similar to other members of the same group. Using a unique data set compiled largely from local sources, we test for these effects in 14 emerging markets: Argentina, Brazil, Chile, India, Indonesia, Israel, Mexico, Peru, the Philippines, South Africa, South Korea, Taiwan, Thailand, and Turkey. We find evidence that business groups indeed affect the broad patterns of economic performance in 12 of the markets we examine. Group affiliation appears to have as profound an effect on profitability as does industry membership, yet strategy scholars have a much clearer grasp of industries than of groups. Moreover, membership in a group raises the profitability of the average group member in several of the markets we examine. This runs contrary to the wisdom, conventional in advanced economies, that unrelated diversification depresses profitability. Overall, our findings suggest that the roots of sustained differences in profitability may vary across institutional contexts; conclusions drawn in one context may well not apply to another. Copyright © 2001 John Wiley & Sons, Ltd.

Group affiliation and confidence in denominational categorization in Northern Ireland

AbstractThe effects of group affiliation on group categorization confidence were examined in Northern Ireland. Subjects were presented with stereotypic name, school and location cues and a group affiliation scale devised by Brown, Condor, Mathews, Wade and Williams (1986). The results suggest that group affiliation has no effect on subjects' confidence in making denominational categorizations.