Innovation in business groups
Abstract
Using novel data on European firms, this paper investigates the relationship between
business groups and innovation. Controlling for various firm characteristics, we find
that group affiliates are more innovative than standalones. We examine several hypotheses
to explain this finding, focusing on group internal capital markets and knowledge
spillovers. We find that group affiliation is particularly important for innovation
in industries that rely more on external funding and in groups with more diversified
capital sources, consistent with the internal capital markets hypothesis. Our results
suggest that knowledge spillovers are not the main driver of innovation in business
groups because firms affiliated with the same group do not have a common research
focus and are unlikely to cite each other's patents. © 2010 INFORMS.
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https://hdl.handle.net/10161/4424Published Version (Please cite this version)
10.1287/mnsc.1090.1107Publication Info
Belenzon, S; & Berkovitz, T (2010). Innovation in business groups. Management Science, 56(3). pp. 519-535. 10.1287/mnsc.1090.1107. Retrieved from https://hdl.handle.net/10161/4424.This is constructed from limited available data and may be imprecise. To cite this
article, please review & use the official citation provided by the journal.
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Show full item recordScholars@Duke
Sharon Belenzon
Professor of Business Administration
Sharon Belenzon is a Professor of Strategy at the Fuqua School of Business. His research
explores the conditions under which firms in developed nations coalesce into groups,
and how different attributes of such groups are related to resource reallocation,
innovation, and firm performance. Professor Belenzon’s research is dedicated to advance
the understanding of how firm organizational structure mediates, and is mediated by,
firm strategy, and of how structure conditions the way in which r

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