performance variance in the context of business groups

In this study, we employ a multilevel analysis to investigate the relative importance of industry,business group, corporation, and business unit effects on the performance of business units that arenested within business group affiliates. Empirical results demonstrate that business unit effects explain(1) about four times as much variance as does the corporate effects, (2) over four times as muchvariance as the industry effects, and (3) over eighteen times as much variance as the business groupeffects in business unit performance. Moreover, the results provide evidence that corporate effects aredistinct from business group effects and it is imperative to study the complex interplay between thetwo distinct headquarters to understand the impact of business group as an organizational form. Thesefindings extend our theoretical and empirical understanding of performance variability in the contextof business groups.