Institutional environment and Business Groups' resilience in Brazil

This article combines the institutional theory and political economy approaches to test hypotheses about how transitions in institutional environments affect the performance of Business Groups. Its primary hypothesis is that the different types of political connections established by Business Groups...

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Bibliographic Details
Published in:Journal of business research 2014-05, Vol.67 (5), p.900-907
Main Authors: Xavier, Wlamir Gonçalves, Bandeira-de-Mello, Rodrigo, Marcon, Rosilene
Format: Article
Language:English
Subjects:
Brazil
Business government relations
Business Groups
Business organization
Economic theory
Financial performance
Institutional environment
Institutionalism
Latin America
Organization theory
Organizational behaviour
Political connections
Political economy
Studies
Transitions
Work environment
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Summary:This article combines the institutional theory and political economy approaches to test hypotheses about how transitions in institutional environments affect the performance of Business Groups. Its primary hypothesis is that the different types of political connections established by Business Groups have moderating effects on this relationship. A sample of 1709 observations, from 317 distinct groups operating in Brazil between 2001 and 2009, was used in unobserved effects panel data models, which included the moderating effects of political connections. Our findings suggest that the institutional environment significantly affects Business Groups' performance and that this effect is moderated by political connections, when assessed in terms of the local or federal government as a minor shareholder of the Business Group. The moderating effects of political connections assessed through campaign donations were not conclusive.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2013.07.009