Business Groups, Institutions, and Firm PerformanceAbstract: The aim of this paper is twofold. First, we analyze whether firms affiliated to national and international business groups outperform independent firms. Second, we investigate whether any potential performance premium associated with national and international business group membership depends on the quality of sub-national, regional institutions. Using data on Italian and Spanish manufacturing firms, we find a short-run growth premium for international business group members—while not for national business group members—with respect to independent firms. We also find that the growth premium associated with international business group membership is detected in low-quality regional institutional environments only.