Khanna and Yafeh (2007) hypothesize that business groups should be more common in economies with less developed markets and institutions. We test the time-series version of this hypothesis by looking at changes in Chilean groups over 20 years (1990-2009). In this period, Chile experienced a deep...

We propose a novel identification strategy for estimating the effects of business group affiliation. We study two-firm business groups, some of which split up during the sample period, leaving some firms as stand-alones. We instrument for stand-alone status using shocks to the industry of the...

We use matched employer-employee data together with data on the ownership networks of Chilean firms to document a novel relationship between inequality in labor income and ownership structures. Exploiting transitions of firms in and out of networks, we show that network affiliation is associated...