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Political connections, business groups and innovation in Asia

Commander, Simon, Estrin, Saul ORCID: 0000-0002-3447-8593 and De Silva, Thamashi (2023) Political connections, business groups and innovation in Asia. Comparative Economic Studies. ISSN 0888-7233

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Identification Number: 10.1057/s41294-023-00226-6

Abstract

It is acknowledged that Asia’s remarkable economic achievements of the past 50 years build on institutional arrangements very different from the West, including the central role of business groups (BGs) as an organisational form. As the Asian economies move from extensive to intensive growth, we enquire whether the BG format will be as effective going forward, especially with respect to innovation. We argue that the ubiquity of BGs in Asia has been associated with the accretion of significant market power, as well as high overall concentration in the economy as a whole. Our empirical work draws on a sample of more than 9000 Asian firms across seven countries. We find that, unsurprisingly, given their access to additional resources, BGs are more innovative than non-affiliates. However we also find that the wider consequences of the BG form for innovation may be negative.

Item Type: Article
Official URL: https://www.palgrave.com/gp/journal/41294
Additional Information: © 2023 The Authors
Divisions: Management
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HB Economic Theory
J Political Science
JEL classification: O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration; Conglomerates; Subsidiaries
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O30 - General
Date Deposited: 29 Aug 2023 16:03
Last Modified: 23 Feb 2024 22:36
URI: http://eprints.lse.ac.uk/id/eprint/120082

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