| Emerging economies are frequently dominated by business groups that own numerous firms in different industries and are usually controlled by wealthy families. These business groups have been theorized to provide benefits to the affiliate firms they control, which are often beyond the reach of unaffiliated firms.;This dissertation examines how access to affiliation-based resources influences the strategies of business group-affiliated firms within an industry. I compare the product market, international, and technology strategies of group-affiliated versus unaffiliated firms. Drawing on business group literature, I argue that affiliation-based resources include access to a more diverse customer base and localized knowledge of foreign markets, resulting in group-affiliated firms serving a wider range of industries and foreign markets and having higher export sales. I also explore the limitations of affiliation-based resources, namely that they are confined to domestic markets, suggesting that group-affiliated firms focus more on domestic sales and less on international sales. From a technological standpoint, I generate competing arguments on whether group benefits support the development of more complex technological capabilities or act as disincentives against development. Finally, I explore whether firm strategy mediates the effect of business group affiliation on firm performance.;I test these arguments on a sample of 822 observations of group-affiliated and unaffiliated Indian software service firms from 1992-2000. Overall, the results support the idea that affiliation-based resources influence firm strategy. In particular, these resources have the greatest influence on the international strategies of firms, enabling group-affiliated firms to export more and serve more foreign markets than unaffiliated firms. For technological capabilities, affiliation with a moderately diversified business group positively influences the development of complex technological capabilities. And, I find that firm strategy does mediate the relationship between business group affiliation and firm performance.;I also demonstrate that firm heterogeneity arises in part from access to differential business group resources. Affiliation with larger and more diversified groups influences firms' strategies, while there are no differences in the strategies of unaffiliated firms and those affiliated with small business groups. And finally, I show that the benefits of affiliation extend beyond protected markets, to unprotected globally competitive environments. |
