The paper examines business groups in emerging markets, questioning whether they are beneficial or harmful. Business groups, consisting of legally independent firms operating in multiple markets, are common in emerging economies and some developed ones. These groups vary in structure, with some relying on equity ties and others on informal connections. They can be politically significant, involved in banking, or family-based. The study highlights the need for a broader perspective on business groups, beyond traditional views of diversification and shareholder conflicts. It notes biases in the literature, such as the lack of discussion on the origins of business groups and the assumption that rent-seeking is the only political economy equilibrium. The paper also points out that most studies use cross-sectional data, limiting the understanding of how groups shape their environments. It suggests future research directions, including examining groups as quasi-venture capitalists or family-based structures. The paper reviews existing literature, which has focused on diversification and shareholder conflicts, but also discusses other perspectives, such as the political economy of business groups, monopoly power, and networks. It finds that group performance varies across countries and that the relationship between group affiliation and performance is complex. The paper also notes that business groups may play a positive role by filling gaps in underdeveloped institutions. It concludes that the existing literature is inconclusive, and that further research is needed to understand the motives and consequences of group diversification. The paper suggests that the popularity of business groups in emerging markets may be due to factors such as conflicts between controlling and minority shareholders, family considerations, or legal factors. The study highlights the need for more empirical research to understand the role of business groups in different economic and institutional environments.The paper examines business groups in emerging markets, questioning whether they are beneficial or harmful. Business groups, consisting of legally independent firms operating in multiple markets, are common in emerging economies and some developed ones. These groups vary in structure, with some relying on equity ties and others on informal connections. They can be politically significant, involved in banking, or family-based. The study highlights the need for a broader perspective on business groups, beyond traditional views of diversification and shareholder conflicts. It notes biases in the literature, such as the lack of discussion on the origins of business groups and the assumption that rent-seeking is the only political economy equilibrium. The paper also points out that most studies use cross-sectional data, limiting the understanding of how groups shape their environments. It suggests future research directions, including examining groups as quasi-venture capitalists or family-based structures. The paper reviews existing literature, which has focused on diversification and shareholder conflicts, but also discusses other perspectives, such as the political economy of business groups, monopoly power, and networks. It finds that group performance varies across countries and that the relationship between group affiliation and performance is complex. The paper also notes that business groups may play a positive role by filling gaps in underdeveloped institutions. It concludes that the existing literature is inconclusive, and that further research is needed to understand the motives and consequences of group diversification. The paper suggests that the popularity of business groups in emerging markets may be due to factors such as conflicts between controlling and minority shareholders, family considerations, or legal factors. The study highlights the need for more empirical research to understand the role of business groups in different economic and institutional environments.