Microeconomic adjustments in Chile during 1977-81 : the importance of being a ʾgrupoʾ

This paper uses the financial statements of industrial enterprises to provide an integrated firm level view of the changes in the Chilean economy during 1977-81. Both real side and financial shocks had major effects on the performance of some types of firms. A handful of powerful conglomerates (grupos) generated large capital gains by investing in the securities of related enterprises. The authors explain why the grupos were suddenly in considerable financial difficulty when the Chilean boom ended in 1982