Innovation in business groups
By: Sharon Belenzon and Tomer Berkovitz.
Contributors: Berkovitz, Tomer.; London School of Economics and Political Science. Centre for Economic Performance.
Series: CEP discussion paper -- no. 833
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Published: 2007
Place of publication: London
Language: eng
Format: Electronic resource
Description: Using novel data on European firms, this paper examines the effect of business group affiliation on innovation. We find that business groups foster the scale and novelty of corporate innovation. Group affiliation is particularly important in industries that rely more on external finance and have a higher degree of information asymmetry. We also find that the innovation of affiliates is less sensitive to operating cash flows. We interpret our results as supporting the 'bright side' of business group internal capital markets and explain how legal boundaries between group affiliates mitigate the inefficiencies found in internal capital markets of US conglomerates.
Notes: Title from publisher's abstract page (viewed on Jan. 4, 2008).

"November 2007."

Includes bibliographical references.

Also available in print.

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