Business groups dominate the economic landscape in many economies around the world. While business groups overcome the institutional voids arising due to inefficiencies of external markets, they also possess market power, which could be economically and socially counterproductive, especially for unaffiliated firms. Drawing on the transaction cost and industrial organization economics, we examine whether the presence of business group affiliated firms in industries restricts the entry of unaffiliated firms or firms affiliated with small- and medium-size business groups. Findings based on (...) Indian firms suggest that investments by business group affiliated firms in an industry have an inverted U-shaped relationship with the investment by unaffiliated firms. However, investments by firms affiliated with large-sized business groups have a U-shaped relationship with the investment by affiliates of small and medium business groups. These findings suggest that the market power of business groups and entry barrier relationship is contingent on the size of the business groups. (shrink)

A number of business ethics theorist have highlighted the potential for economics to contribute to the advancement of business ethics. In response, this article emphasizes the insights of a particular area of economics that could provide such expansion and development. Subjectivist economics may yet provide an effective analytical framework through which to investigate and evaluate business decision making, and hence the ethics of business. Integrating the concepts of uncertainty, time and imagination, subjectivist economic theory contributes to a greater appreciation of (...) economic choice and behaviour. While such notions are often effectively omitted from modern economic analysis to aid formal representation, business ethicists could utilize such concepts more effectively than their colleagues in economic theory. Significantly, the well-known economists who have championed the insights of subjectivist economics have themselves recommended its extension to an analysis of ethics. (shrink)

In the wake of recent corporate scandals, this paper examines the claim made by John Boatright that business ethics, as it is currently conceived, “rests on a mistake.” Ethics in business should not be achieved through managerial vision, discretion or responsibility; rather, ethics should shape the design of institutions that regulate business from the outside. What ethicists should advocate for, according to Boatright, are moral markets not moral managers. I explore the empirical and normative dimensions of his claim with special (...) attention paid to the extent to which Boatright’s development of the economic theory of the firm supports his position. I conclude by suggesting some reasons why moral markets and moral management are compatible frameworks for corporate reform. (shrink)