Engineering growth: Business group structure and firm performance in China's transition economy

Published

Journal Article

Business groups have received increasing attention from academics interested in interorganizational relations and their impact on firms. As part of industrial reform, the Chinese government began in the mid-1980s to encourage firms to form business groups with structural characteristics that promised to enhance financial performance and productivity. Using 1988-90 panel data on China's 40 largest business groups and their 535 member firms, the study finds that the presence and predominance of interlocking directorates and finance companies in business groups improved the financial performance and productivity of the groups' member firms. In addition, firms in groups with nonhierarchical organizational structures performed better than firms in hierarchical groups, suggesting that complete integration into a hierarchical organization is not an optimal strategy.

Full Text

Duke Authors

Cited Authors

  • Keister, LA

Published Date

  • January 1, 1998

Published In

Volume / Issue

  • 104 / 2

Start / End Page

  • 404 - 440

International Standard Serial Number (ISSN)

  • 0002-9602

Digital Object Identifier (DOI)

  • 10.1086/210043

Citation Source

  • Scopus