Business group characteristics and firm operating performance: Evidence from Chile
Purpose - The purpose of this paper is to examine the impact of business group characteristics on firm?operating performance in Chile.
Design/methodology/approach - Using a multiple regression model, this study examines the effect of business group characteristics (interlocking of directors, management concentration, and business group specialization) on operating performance (ROA growth) in a sample of 104 publicly traded Chilean firms.
Findings - It is documented that, except for interlocking of directors, the two other business group characteristics (management concentration and business group specialization) are significantly related to the operating performance of firms belonging to Chilean business groups. These findings suggest that Chilean business groups would improve or deteriorate the performance of their affiliated firms modifying its characteristics.
Originality/value - Too little is known about the effect of business group characteristics on firm?operating performance in Latin American countries such as Chile because there is no research that analyses its impact on firm?operating performance in the region.