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Management International Review
Published in: Management International Review 2/2012

01-04-2012 | Research Article

Product Diversification and International Expansion of Business Groups

Evidence from India

Authors: Assoc. Prof. Vikas Kumar, Assist. Prof. Ajai S. Gaur, Dr. Chinmay Pattnaik

Published in: Management International Review | Issue 2/2012

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Abstract

  • Does product diversification constrain or boost international expansion of business groups from emerging markets? What is the role of international orientation and group resources in moderating this relationship? Given the dominance of business groups as an organizational form in emerging markets and their recent international expansion, these research questions are pertinent and timely.
  • We use GLS fixed-effects models to test our arguments using longitudinal data on foreign direct investment of 482 business groups, incorporating 4,038 firms from India over a period of 8 years from 2001–2008.
  • We find that a high product diversification has an adverse effect on the international expansion of emerging market business groups, and that international orientation and group resources positively moderate this relationship.
  • Our findings suggest the inherent trade-off that exists between strategies of product diversification and international expansion for emerging market business groups. Those business groups that can effectively employ their learning from prior international exposure and their technical competences are better placed to simultaneously pursue a strategy of product diversification and international expansion.
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Metadata
Title
Product Diversification and International Expansion of Business Groups
Evidence from India
Authors
Assoc. Prof. Vikas Kumar
Assist. Prof. Ajai S. Gaur
Dr. Chinmay Pattnaik
Publication date
01-04-2012
Publisher
SP Gabler Verlag
Published in
Management International Review / Issue 2/2012
Print ISSN: 0938-8249
Electronic ISSN: 1861-8901
DOI
https://doi.org/10.1007/s11575-012-0133-4

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