Diversified business groups are prevalent in emerging markets. These business groups are often considered to be a response to compensate for market imperfections (e.g. in labor markets, limited enforcement of contracts, inadequate rule of law and other institutional deficiencies). Most authors also stress that these groups not only respond to the environment but also shape and influence it. On the one hand these business groups may provide goods and services for the benefit of group members to overcome deficient public goods. On the other hand, these business groups often also maintain close relationships with governments in countries in which they operate, which may result in imperfect competition or rent-seeking behavior.

Write a brief research report in which you to:

1. Address the main arguments in the discussions concerning the different impacts of business groups in emerging markets.

2. Discuss to what extent these arguments are still valid as business groups from emerging markets are now rapidly internationalizing

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1 Different impacts of business groups in emerging markets Emerging market is a broad term which represents the lesser developed countries which are commencement to occurrence speedy economic growth a... View the full answer