The Indian Corporate Structure and the ‘Theory’ of Emerging Market Business Groups

Abstract

This article critically evaluates the value of the contemporary analysis of the ‘emerging market’ business group found in international literature for studying the institution in India. It argues that this value is limited by the top-down and ahistorical approach most of that analysis tends to adopt. The article shows that while business groups have been a common feature of the Indian corporate scene, they do not conform to the static conceptions of the business group found in the current literature. The article also presents a critical review of the influential functional explanation of developing country business groups as responses to ‘institutional voids’. It argues that this theory neither explains the institution of the group nor does it really shed light on the phenomenon of concentration expressed through that institution.