Power distance diversification, ownership structure, and business group performance

From the perspective of the organizational learning theory, this study examines the effects of power distance diversification, government ownership, and foreign ownership on business group performance. To test the hypotheses, the study collects data from the top 100 Taiwanese business groups from 1999 to 2013. The results reveal an S-shaped relationship between power distance diversification and business group performance. It also reveals a decline, increase, and decline in performance in the low-, moderate-, and high levels of power distance diversification, respectively. The government and foreign ownership exert negative and positive moderating effects, respectively, on the S-shaped relationship. Finally, this study has important theoretical and managerial implications for strategic and international business management.