Business Groups and Employment

Business Groups and Employment

Mara Faccio, William O’Brien

Series number :

Serial Number: 

Date posted :

November 13 2017

Last revised :

February 25 2020
SSRN Share


  • business groups • 
  • Employment • 
  • Business Cycles

Using a newly assembled 50 country firm-level database spanning 19 years, we document a “bright side” for employees of business group affiliated firms: less pronounced fluctuations in employment than unaffiliated firms in response to macroeconomic shocks.

The results are robust to a variety of tests designed to mitigate endogeneity concerns, including propensity score matching and comparisons of successful and failed group integrations, and are present in both booms and recessions. Our results are most consistent with group internal labor markets rather than several alternative explanations (internal capital markets, a lower overall sensitivity to shocks in group firms, or agency problems).



Real name:
Research Member
Purdue University - Mitchell E. Daniels, Jr. School of Business
Real name:
William O’Brien