The Future of Business Groups in Emerging Markets: Long Run Evidence from Chile

45 Pages Posted: 26 Jan 1999

See all articles by Tarun Khanna

Tarun Khanna

Harvard University - Strategy Unit

Krishna Palepu

Harvard University - Harvard Business School; Harvard University - David Rockefeller Center for Latin American Research; Harvard Business Review; NBER; International Academy of Management

Date Written: December 1998

Abstract

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

Khanna, Tarun and Palepu, Krishna, The Future of Business Groups in Emerging Markets: Long Run Evidence from Chile (December 1998). Available at SSRN: https://ssrn.com/abstract=143491 or http://dx.doi.org/10.2139/ssrn.143491

Tarun Khanna (Contact Author)

Harvard University - Strategy Unit ( email )

Harvard Business School
Boston, MA 02163
United States
617-495-6038 (Phone)
617-495-0355 (Fax)

Krishna Palepu

Harvard University - Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
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United States
617-495-6759 (Phone)
617-496-7363 (Fax)

HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=pub&facId=6527

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HOME PAGE: http://hbr.org/authors/palepu

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International Academy of Management ( email )

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