For many years, research has been done on wide and diversified Business Groups (BG). Despite the different points of view on the last five decades, most scholars are skeptical about the benefits of diversification. However, an erratic behavior is observed in emerging economies, mainly due to the institutional environment. BGs develop and prosper on those countries. Motivated by this phenomenon, the present article analyzes the BG development in Brazil. This manuscript shows how BGs have found a fertile ground in Brazil. In their genesis, BGs have benefited from industrial policies such as the import substitution program to reach market dominance. Historically, they have also benefited from institutional voids, some of them generated during crises, as, for instance, the high banking interest rating spreads in several occasions. BGs have been also able to take advantage of the institutional changes during pro-market reforms in Brazil, using governmental incentives to act actively in the privatization process. By showing how BGs emerged and developed in Brazil, taking advantage of institutional voids and shifts, the study presents important implication for theoretical and empirical researches on the theme.
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