Neither Parasite nor Paragon: Are Business Groups a Source of Competitive Power?

Abstract

While profit persistence has been widely examined in the current literature, there have been no extensive studies on the link between business group membership and profit persistence on an emerging market. Using panel data econometric methods, this article examines the link between profit persistence and membership in a large industrialists' group, also known as the TUSIAD (Turkish Industrialists' and Businessmen's Foundation), in the Turkish manufacturing sector in the period 1990-2017. The findings show that the relative magnitude of profit persistence of firms with TUSIAD membership is higher than those without TUSIAD membership in the Turkish manufacturing sector.