Business Groups

Working Paper

16 August 2017

Why Do Family Business Groups Expand by Creating New Public Firms? The Role of Internal Capital Markets

We document a new channel through which a family business group's internal capital market supports its members. Using data from 44 countries, we provide evidence that groups use internal capital to incubate difficult-to-finance...

Ronald Masulis | Peter Kien Pham | Jason Zein
01 November 2016

Insurance Between Firms: The Role of Internal Labor Markets

We investigate how internal labor markets (ILMs) affect labor adjustments and performance in business groups. We show that group-affiliated units faced with positive shocks to growth opportunities rely on the ILM to ensure swift...

Giacinta Cestone | Chiara Fumagalli | Francis Kramarz | Giovanni Pica
01 July 2016

Do Business Groups Harm Capital Allocation Efficiency Outside the Business Group?

This study investigates whether business groups can harm the capital allocation efficiency of non-business group firms. From a sample of Korean firms (1987 to 2010), we compute an annual index of the collective strength and dominance...

Yunxiao Liu | Woochan Kim | Taeyoon Sung
01 August 2009

The Deep-Pocket Effect of Internal Capital Markets

We provide evidence suggesting that incumbents’ access to group deep pockets has a negative impact on entry in product markets. Relying on a unique French data set on business groups, our paper presents three major findings. First,...

Xavier Boutin | Giacinta Cestone | Chiara Fumagalli | Giovanni Pica | Nicolas Serrano-Velarde