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The purpose of this paper is to examine two prominent perspectives on business group functioning, institutional void (IV) and entrenchment/exploitation (EE), that make different predictions about the effect of business group (BG) on the economy. The authors examine the effects of BG prevalence in an economy and its effect on macroeconomic outcomes including foreign direct inward and outward investment, innovation and development of the financial sector.

The authors build a unique database by extracting estimates of BG prevalence for multiple countries between 1978 and 2012 from the existing literature and use this to test conflicting predictions derived from the IV and EE perspectives, respectively.

The authors find no consistent evidence that BG prevalence diminishes over time with economic development as IVs diminish, which is predicted by the IV perspective. Instead, the long-term persistence of BGs in many countries appears to be more consistent with the EE perspective. However, this study also finds no support for the perspective that high levels of BG prevalence are negatively associated with country-level indicators and determinants of economic development and competitiveness, as suggested by that perspective.

The authors conclude that there is no robust support for either the IV or the EE perspective and highlight the need for more contextualized theorizing about the evolution of BGs.

This study aims to investigate the moderating role of audit quality on the association between business group affiliation of firms and earnings management in the South Asian emerging economy of Bangladesh.

A usable sample of 917 firm-year observations was drawn from companies listed on the Dhaka Stock Exchange from 2005 to 2013. Data were collected from the annual reports of sample companies. Earnings management was measured using the absolute value of discretionary accruals, and two proxies were used to measure audit quality: auditor size and industry specialisation.

Results showed that the level of discretionary accruals is positively associated with business group affiliation status, and higher audit quality reduces this association. This suggests that in environments without strong investor protection, complex ownership structures create opportunities for controlling shareholders to expropriate minority shareholders. The controlling shareholders could then mask this practice through earnings management. The findings also show that in environments lacking strong investor protection, audit quality can help improve earnings quality for group-affiliated firms.

The results suggest that financial statement users need to consider audit quality for a reasonable evaluation of the earnings quality of business groups. The study also informs regulators by illuminating audit quality as a key area of focus in any effort directed at enhancing stock market efficiency through improved earnings quality in environments where business group affiliation is prevalent.

This study documents empirical evidence on the moderating effect of audit quality on the positive association between business group affiliation and earnings management.

The purpose of this paper is to explain the link between national business system (NBS) and innovation decisions at the firm level by offering sequentially ordered sense-making mechanisms that enable the formation of firm-specific knowledge repositories and knowledge-processing capabilities.

This study engages in an extensive scale development effort to collect representative data about the NBS in the Pakistani setting, complemented by relevant validity and reliability tests. The overall theoretical model was tested on 214 firms by means of a structural equation modeling approach, using partial least-squares algorithms.

The results statistically supported the role of firm-level knowledge repositories (intellectual capital) and knowledge exploration and exploitation capabilities (absorptive capacity) as sequential mediators in the association of NBS and firm-level innovation. Besides, bridging networks of lateral ties among Pakistani businesses are found to be more effective than bonding networks of vertical ties in encouraging radical innovations.

This study significantly extends the literature about the NBS approach. It provides specific sense-making mechanisms (i.e. priming, triggering and editing) about how abstract institutional templates constituted at the business system level are translated into firm-level actionable sets by the help of intangible resource repositories and processes that guide knowledge exploration and exploitation.

This study aims to examine the association between mandatory corporate social responsibility (CSR) regulations (CSR mandate) and social disclosures (SOCDS) in India. It also investigates whether CSR committees mediate the relationship between CSR mandate and SOCDS. Furthermore, this paper explores how business group (BG) affiliation moderates CSR committee quality and SOCDS.

This study uses a data set of 5,345 observations from the Bombay stock exchange (BSE)-listed firms over 10 years (2011–2020) to examine the research questions. Baron and Kenny’s (1986) three-step model is estimated to examine the mediating role of CSR committees on the relationship between CSR mandate and SOCDS.

The study reveals that the CSR mandate positively impacts SOCDS in India due to coercive pressures. CSR committees mediate this relationship, with higher CSR committee quality leading to increased SOCDS. Furthermore, the authors report that SOCDS in India is positively related to CSR committee quality, and this relationship is stronger for BG firms. Finally, the supplementary analysis reveals that promoting CSR committee quality enhances firms’ likelihood of meeting CSR mandatory spending and actual CSR spending in India.

This research contributes to the academic literature by shedding light on the intricate dynamics of CSR mandates, CSR committees and SOCDS in emerging economies. Notably, the authors identify the previously unexplored mediation role of CSR committees in the link between CSR mandates and SOCDS. The creation of a composite index that measures complementary CSR committee attributes allows us to undertake a novel assessment of CSR committee quality. An examination of the moderating influence of BG affiliation documents the importance of CSR committee quality, particularly in governance, for enhancing SOCDS transparency within BG firms.

Although tax-motivated income shifting has been widely explored, no studies have as yet analyzed the association between ownership structure and management decisions about income shifting. The ownership structure of multinational groups is characterized by different levels of minority interests, and our aim is to establish whether income shifting is explained by the aim of expropriation of minorities, as well as taxation avoidance.

We collect data on a sample of European parent companies located in five countries and their foreign subsidiaries, and run a multivariate regression based on the Huizinga and Laeven (2008) model.

Our results support the idea of minority expropriation, finding evidence of ownership-motivated income shifting. We also find that the level of minority protection affects ownership-motivated income shifting, and that, when both are present, expropriation is statistically significant.

Although the study looks at a wide range of subsidiaries, a limitation may be that it examines only firms having parent companies in five European countries. Further research would overcome this limitation and extend the literature and take into account other income-shifting contextual variables. Our results may lead regulators to pay more attention to the protection of minority interests.

This research offers insights to companies and investors, and should help them to make better-informed decisions and evaluate the best contexts for investments.

This study enriches the literature on income shifting by revealing that it can be caused by factors other than the desire to avoid taxation. It suggests that ownership structure is crucial.

This paper aims to evaluate the past contributions of Multinational Business Review (MBR), identify research gaps and opportunities and provide a research agenda that addresses several sustainability-related and other contemporary challenges.

This study analyzes 400 papers published between 2003 and 2021 to map the MBR’s intellectual and conceptual structure using advanced bibliometric techniques.

The bibliographic coupling technique identifies core clusters in MBR papers, and subsequent content analysis of these clusters reveals the following five research fronts: internalization theory and the future of international business (IB) research; internationalization and firm performance; regionalization versus globalization debate; internationalization by emerging market firms; and global dynamic capabilities and firm internationalization.

To the best of the authors’ knowledge, this is the first comprehensive analysis of past contributions of MBR to research on IB and suggests a way for MBR to play a seminal role in addressing contemporary challenges in IB.

Prior literature shows that income shifting is widely performed by multinational groups, but no research as yet has studied alignment between controlling and minority interests on tax avoidance in multinational groups with high ownership concentration. This study aims to analyze the effect of high ownership concentration on cross-jurisdictional tax-motivated income shifting.

To test the hypotheses, this study focuses on European multinational groups. Data are collected on European parent firms and each subsidiary. The model considers the natural logarithm of profit before tax and tax incentive.

Findings show that subsidiaries shift income for tax avoidance purposes. The alignment of shareholders’ interests and ownership concentration leads to higher levels of tax avoidance through subsidiaries’ infra-group transactions. High ownership concentration decreases the influence of minority interests and allows parent company shareholders to choose a tax avoidance strategy more freely.

The results suggest that taxation levels need to be harmonized to reduce the incentive for tax avoidance and the incentive of governments to reduce their statutory tax rate, to shift profits inwards and reduce outward flow. Without international coordination, this approach may lead to the unevenness of legislative frameworks around the world, and bring significant disadvantages for some countries, influencing economic growth and business development.

This study extends prior findings showing that tax-motivated income shifting as a method of tax avoidance in European multinational groups is stronger in groups with high levels of ownership concentration. This means that managers have the incentive to shift income between subsidiaries for tax and ownership benefits in favor of the parent company’s shareholders and against minority interests.

Many large construction firms (LCFs) adopt product diversification (PD) to counter downturns and spread risks. However, no detailed information is available concerning the type of PD that improves their performance. In addition, it is still uncertain how much changes in institutional dimensions influence the effectiveness of PD. Therefore, the aim is to resolve this issue by establishing a model that shows the extent of this influence.

The generalised method of moments (GMM) estimator is used to model the PD strategies of 86 LCFs in Malaysia over 14 years (2003–2016) and its impact on productivity and profitability performance.

Unrelated diversification (UD) decreased firm performance in 2003–2016, while related diversification (RD) had a positive impact during the more liberal 2010–2016 phase. The models show that the impact of PD is highly dependent on changes in institutional dimensions.

Firstly, managers may adjust the type of PD and its level of diversification to improve firm performance. Secondly, they may devise PD strategies based on changes in institutional dimensions to maximise their effectiveness.

The study contributes to the literature by determining the optimal amount of PD (including RD and UD) and its impact on performance. Secondly, the study is the first to investigate the moderating relationship of the institutional dimensions of economic and regulatory institutions on PD-firm performance. Thirdly, the study is the first to explore the components of technical-scale-scope economies (movement towards and around the production frontier), this being crucial to the strategy that was only conjectured in previous studies.

HIV/AIDS has implications of varying severity across a wide spectrum of businesses in South Africa. Financial accountability is therefore required to enable investors and other stakeholders to be advised regarding the effect of HIV/AIDS on company performance and to make informed decisions. This paper explores financial accountability with regard to HIV/AIDS. It investigates top management’s awareness, coping strategies and financial information (available and required) that is communicated internally and to stakeholders. Its empirical content concentrates on major public companies that operate in industries in which HIV/AIDS is known to be present. It reveals that companies are informed and pragmatic. However, many do not engage in legally permissible prevalence testing, and thereby frustrates attempts at a clear definition of the problem and at forecasting. Most companies are therefore unable to project what the effect of HIV/AIDS on future performance and profitability will be. The paper concludes that, although HIV/AIDS receives attention in terms of corporate governance, there is an absence of financial accountability via annual reports and financial statements. Many companies have no information available, while others may elect not to disclose it.

This research blends perspectives of the Eastern phenomenon of guanxi with the more Western perspectives of relationship marketing and customer centricity. Extending scholarship on guanxi in marketing (e.g. Park and Luo, 2001; Sheu and Hu, 2009; Luo et al., 2008; Fowler and Reisenwitz, 2014), the objective is to highlight the indirect role of customer centricity (i.e. how visible or central it is for the business partner to communicate with/have information sharing with), for firms in regions with a prevalence of guanxi.

The empirical model is tested in context of global marketing in the business-to-business (B2B) logistics industry (n = 508). A total of 508 global logistics employees and managers with experience in global business participated in the survey in Taiwan. Structural equation modeling was used for data analysis with multi-group analyses.

Customer centricity intensifies positive outcomes of guanxi prevalence. Specifically, a high level of customer centricity strengthens established associations among guanxi prevalence, trust, relationship commitment and firm performance.

While most work on guanxi has a focus in China, this research focuses on Taiwan. While building on a wealth of literature, relatively less work has focused on customer centricity.