Business Group and Affiliated Firms’ Performance

Abstract

Some argue that business groups in emerging could be beneficial for affiliated firms. On the other hand, however, group affiliation could also improve performance. In this paper, we empirically examine the impact of being a member of business group on financial performance by studying Indonesian firms over the 2004-2009 period. We test the empirical model using static panel method. Overall, our empirical results do not provide evidence that affiliation with business group could improve performance. However, some business group members perform superior than others.