The Future of Business Groups in Emerging Markets: Long Run Evidence from Chile
45 Pages Posted: 26 Jan 1999
Date Written: December 1998
We demonstrate variation in the extent to which firms benefit from their affiliation with Chilean business groups in the 1988-1996 period. The net benefits of unrelated diversification are positive if group diversification exceeds a threshold level, though this threshold increases with time. We find evidence of non-diversification related group benefits, which atrophy over time. We conjecture that the evolution of institutional context alters the value creating potential of business groups, though it does so slowly.
JEL Classification: L2, G3, P5
Suggested Citation: Suggested Citation