Research Summary: This article studies two interrelated questions. First, why did business groups in emerging markets thrive and prevail after pro-market reforms were implemented in their countries? And, second, what type of adaptation strategies can multinational corporations develop in order to be competitive in economies dominated by business groups? By conducting an archive-based historical network analysis of business groups in Chile during periods of major economic and political transitions, we maintain that business groups were created in periods of protectionism as a way to navigate economies with strong state participation or inefficient markets. In this process, these groups endogenously created an economy with market imperfections resulting from the dominance of these business groups. This means that the transition toward more open markets did not necessarily create more competitive environments and that elites in emerging economies were unwilling to abandon the advantages of having links between their businesses. Multinationals entering this economy adapted by becoming business groups themselves and creating links with other business groups. In sum, strategies devised as means to reduce market imperfections created new imperfections that incentivized the business groups to retain their structure and forced multinationals to become business groups. Managerial Summary: Large diversified conglomerates known as business groups dominate the markets of emerging economies. These groups have survived important changes taking place in their own countries, including the abandonment of an import substitution industrialization model for an open market one or changes from military regimes to democratic ones. This article explores two aspects related to these transitions most emerging economies have gone through. First, why did some business groups survive despite the fact that many of them were created and grew during protectionist times? And, second, what strategies have multinational corporations developed when operating in economies dominated by those powerful business groups? We show, first, that some business groups survived the transition by rearranging the type of links they had with each other, and, second, that multinationals competing in economies dominated by those business groups opted for becoming business groups themselves.