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Does a routers firmware affect range as well as performance?

It could, if the wireless driver received any change to its output power tables.
 
Can updating the firmware actually increase the wireless range of a router?
if the firmware upgrade responded to an issue related to wifi range and added it as a fix or as merlin suggested improved wireless driver coding

but ether way it wouldn't be a huge increase as those sort of fixes usually done at beta testing stage , so dont expect massive increases in wifi with a fw update as we are already at max eirp / transmission power levels
 
Can updating the firmware actually increase the wireless range of a router?

Within a purely factory firmware view - rarely, but it can happen... changes to the WiFi drivers are typically done more for stability/bug fixes - the radio certifications limit what the vendors can do on the wireless side before having to resubmit for regression testing/recertification...
 

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