Group Affiliation and Firms Export Intensity: A Cross-Country Study

Abstract

The paper investigates whether the export intensity of business companies is greater for group-affiliated firms (GAFs) or for standalone firms (SAFs). The empirical analysis makes use of the World Bank Enterprise Survey for Latin American economies. The results show that GAFs have lower export intensity than SAFs. We also find that the difference between GAFs and SAFs export intensity is much stronger in the service sectors, industries in which Latin American business groups have actively been investing in recent years. These results provide support to the groups as parasites theoretical view, which emphasizes the negative consequences that groups have for economic development.