Business group affiliation and foreign subsidiary performance.

Business group (BG) affiliation affects the strategic behavior and performance of firms.Until now it has been theoretically unclear and insufficiently empirically tested whether affiliation advantages extend to the foreign subsidiaries of group members. We attempt to determine if they do, and if so, to identify the boundary conditions that matter. We analyze a large panel of 451 foreign subsidiaries of 136 Indian multinational firms over the 2003–2012 period and find that BG affiliation does enhance foreign subsidiary performance when host-market institutions are weak and when the parent is in manufacturing