Global Legacy and Domestic Persistence
This chapter explores the prevalence of business groups in Britain. It shows that during the nineteenth century British merchant houses established business groups with diversified portfolio and pyramidal structures overseas, primarily in developing countries, both colonial and independent. These business groups were resilient and successful until the late twentieth century. In the domestic economy, the business-group form had a more limited role. Large single product firms were the norm, which over time merged into large combines with significant market power. This reflected a business system in which a close relationship between finance and industry was discouraged, but there were few restrictions on the transfer of corporate ownership. Yet large and successful diversified business groups did emerge which had closely held shareholding and international businesses. Especially between the 1970s and the 1990s, large diversified conglomerates also flourished. This evidence shows that diversified business groups can add value in mature markets.
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