Diffusion of internationalization in business group networks: evidence from India

The purpose of this paper is to suggest that business group (BG) networks act as conduits for diffusion of information and resources pertaining to internationalization. It considers three types of BG networks arising from three different types of ties- director interlock, direct equity, and indirect equity. In particular, it examines the effects of cohesiveness of these BG networks on the diffusion of internationalization within a BG.

Drawing on social network perspective, it is hypothesized that, for each type of network, cohesiveness enhances within-BG similarity of the extent of internationalization. An empirical investigation is conducted on a sample of 55 Indian BGs for the period 2009-2013.

Results support all the three hypotheses, suggesting that higher level of cohesiveness leads to higher level of within-BG similarity of the extent of internationalization, for all three network types.

Findings of this study contribute to the BG literature by examining the effects of BG network cohesiveness on the diffusion of internationalization within a BG, for three types of BG networks.