Innovation in business groups
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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.
Published Version (Please cite this version)10.1287/mnsc.1090.1107
Publication InfoBelenzon, S; & Berkovitz, T (2010). Innovation in business groups. Management Science, 56(3). pp. 519-535. 10.1287/mnsc.1090.1107. Retrieved from http://hdl.handle.net/10161/4424.
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Associate Professor of Business Adminstration
Sharon Belenzon is an Assistant 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