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The Future of Business Groups in Emerging Markets: Long-Run Evidence from Chile
Tarun Khanna and Krishna Palepu
The Academy of Management Journal
Vol. 43, No. 3 (Jun., 2000), pp. 268-285
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/1556395
Page Count: 18
You can always find the topics here!Topics: Portfolio diversification, Business structures, Capital markets, Transaction costs, Financial management, Political economy, Emerging markets, Economics, Group size, Corporate governance
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We demonstrate variation in the extent to which firms benefited from their affiliation with Chilean business groups in the 1988-96 period. The net benefits of unrelated diversification were positive if group diversification exceeded a threshold level, though this threshold increased with time. Sizable group benefits unrelated to diversification also existed, but they atrophied over time. We conjecture that the evolution of institutional context alters the value-creating potential of business groups, albeit slowly.
The Academy of Management Journal © 2000 Academy of Management