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Business concentration, ownership structure and business group performance: An S-shaped hypothesis

Published online by Cambridge University Press:  04 November 2024

Shan-Huei Wang Open the ORCID record for Shan-Huei Wang [Opens in a new window]  and
Jung-Hua Chang
Shan-Huei Wang
Affiliation:
Department of Business Administration, College of Management, Tunghai University, Taichung City, Taiwan (R.O.C.)
Jung-Hua Chang*
Affiliation:
Institute of Marketing Communication, College of Management, National Sun Yat-sen University, Kaohsiung, Taiwan (R.O.C.)
*
Corresponding author: Jung-Hua Chang; Email: [email protected]
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Abstract

Drawing on resource-based and agency theories, this study examines the effects of business concentration and ownership structure on business group performance. On the basis of panel data (2004–2018) from the top 100 Taiwanese business groups investing globally, this study finds an S-shaped relationship between business concentration and business group performance with the interaction of advantages and costs at different levels. Performance increases when there is little business concentration, decreases when there is a moderate amount and increases again when there is a high level of business concentration. In addition, this study hypothesizes that ownership structure has a different moderating effect on this relationship. The family business group has a positive moderating effect; however, outsider direct and manager ownership have no significant moderating role. These findings have important theoretical and managerial implications for business groups.

Keywords

business concentrationbusiness groupownership structureS-shaped hypotheses
Type
Research Article
Information
Journal of Management & Organization , Volume 30 , Issue 6 , November 2024 , pp. 2350 - 2366
Copyright
© The Author(s), 2024. Published by Cambridge University Press in association with Australian and New Zealand Academy of Management.

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