Jerry Haar

Do governing institutions affect foreign direct investment inflows? New evidence from emerging economies

In recent years, Western governments and international financial institutions have urged developing countries to undertake a range of institutional reforms to attract greater investment flows and hasten socioeconomic development. But do countries with strong governing institutions and business-friendly policies truly attract proportionally more foreign direct investment (FDI) than those with weaker institutions and a less favourable policy mix? This study seeks to answer this question by examining data on FDI inflows for a sample of 64 emerging economies over time. The article begins by reviewing the literature on the determinants of FDI and recent empirical studies probing the connection between governing institutions and FDI flows to emerging economies. Based on this literature, several hypotheses are developed and tested with a new measure of institutional quality. The article concludes by interpreting the results of the statistical analyses, considering their policy implications, and offering directions for future research.

Does gender matter? A review of work‐related gender commonalities

Purpose – The purpose of this study is to examine the degree to which differences and similarities exist between female and male business professionals.Design/methodology/approach – A total of 1,164 students from three English‐speaking countries completed a 75‐item multi‐dimensional tool that consists of 17 empirically independent work preference constructs associated with psychological learning styles, work values, work interests, and personality temperament.Findings – There are few notable or significant differences between the work preferences of female and male business professionals within each country. Differences between the work preferences of female and male business professionals are not consistent from nation to nation.Research limitations/implications – Additional research on gender differences of work preferences needs to include larger samples of college students majoring in non‐business subjects as well as working adults drawn from related occupational fields.Practical implications – Manage...

The future of entrepreneurship in Latin America

Introduction: the Emergence of an Entrepreneurial World J.Haar & E.R.Brenes Entrepreneurship in Argentina M.Pradilla Entrepreneurship in Brazil: the Role of Strategy and the Institutional Environment A.da Rocha , J.Ferreira da Silva & J.Carneiro Entrepreneurship in Chile G.Jimenez & K.Usach The Emergence of an Entrepreneurial World. Country Case: Colombia R.Vesga & A.C.Gonzalez Costa Rica: IT Entrepreneurs Leapfrogging for Innovations L.J.Sanz & R.Porras Entrepreneurship in Mexico V.Jones The Emergence of an Entrepreneurial World: Peru K.Nakamatsu , O.Morales & J.Serida Entrepreneurship in Venezuela: Case Study R.Vainrub & A.Rodriguez Conclusion E.R.Brenes & J.Haar

The American Depository Receipt (ADR): A creative financial tool for multinational companies

The unpredictability of floating interest rates world-wide continues to cause deep concern among the Chief Financial Officers (CFOs) of many multinational corporations. Wide fluctuations in credit terms have made heavy use of longterm debt that much more risky. In fact, growing multinational firms whose home capital markets are “limited” (i.e., not sufficiently liquid or segmented) have been left especially vulnerable. Moreover, many international banks have refused to lend to these firms. In a number of instances, however, multinational companies have achieved moderate success in meeting their short-term goals by arranging the discounting of bankers’ acceptances into the capital markets of the confirming bank’s country. This technique has provided an available means of short-term trade financing. In terms of meeting their long-term goals, many multinationals have had to face uncontrollable debt service commitments. These burdens have actually threatened the financial strength of these companies. Faced with excessive costs and risks when utilizing traditional forms of debt financing, the CFOs of many firms have been forced to examine alternate avenues of equity-based financing 171.

Introduction: Can Latin America Compete?

Adecline in foreign direct investment and reinvestment in the Americas, in tandem with a sharp rise in Asia; the resurgence of antiliberal populism (for example, in Venezuela, Bolivia); widening income inequality; excessive business regulation; barriers to financial access; lackluster educational performance; paltry expenditures in RD and deteriorating infrastructure lead one to seriously question: Can Latin America compete? On the other hand, macroeconomic stability, low inflation, privatization, trade liberalization, increasing technology adoption and dissemination, and the ongoing boom in the demand and prices of commodities serve as significant counterweights to the negative indicators cited. The growth and expansion, regionally and globally, of Latin American multilatinas such as Embraer, Carvajal, America Movil, Falabella, Odebrecht, and Techint are testimony that selected Latin American firms—if not entire nations—can, indeed, compete.1

Devaluation, competitiveness and new business formation in emerging countries

In September 2010, Brazil’s Finance Minister, Guido Mantega, used the term “currency war�? with reference to monetary policies implemented by different countries to generate an artificial devaluation of their currency and achieve a cheaper, more competitive domestic economy that may be attractive to foreign investors. Similar cases have been documented since the 1930s Great Depression, when several countries abandoned the gold standard as backing for their currencies. More recently, a large-scale asset purchase by Japan’s Central Bank in 2013 was singled out as a strategy aimed at generating devaluation of the yen. This research uses statistics of new business formation density reported by Doing Business for 30 emerging countries in the period 2004-2011 to evaluate the impact of devaluation measured by the behavior of the real effective exchange rate (REER) on the rate of new business formation (NBF). It is determined how variables associated with competitiveness affect the relationship between devaluation and business formation. Results show that devaluation has a positive effect on NBF in the short term, which gets diluted in the long term. Countries with greater competitiveness have less dependence on devaluation to increase the number of businesses.

Foreign Investment, Institutional Quality, Public Expenditure, and Activity of Venture Capital Funds in Emerging Market Countries

Abstract This paper empirically analyzes the effects of foreign direct investment (FDI), institutional quality, and the size of a government on venture capital (VC) activity. We conclude that institutional quality, FDI, and public spending have definitive importance as elements for the development of a public policy that increases the quantity and quality of VC fund (VCF) investment. Higher institutional quality, greater FDI, and lower public spending allow the volume of VCF investment to grow. FDI shows a higher level of significance in promoting investment in high-tech companies, and institutional quality increases the productivity of FDI investment in the generation of VCF. Government spending dramatically and (counter-intuitively) adversely affects the activities of VCF. Notably, the higher the institutional quality of a country, the less state intervention is required to promote investment of VCF. The results are consistent with the hypothesis of the FDI spillover and crowding out by public spending.

Entrepreneurial firms and cluster competitiveness: institutions and public policy determinants

Globalisation brings many competitive challenges to emerging economies, particularly to small and medium-size firms (SMEs). Focusing on the information technology cluster in Brazil, Latin Americas largest economy, and a high-tech municipality (Campinas) the researchers examined the role of governmental institutions and their interaction with business and academe to foster competitiveness. Despite a high quality infrastructure and an excellent workforce, most public sector initiatives are not specific to SMEs nor to the needs of companies located in Campinas. Factors like: 1) the lack of a governance structure to coordinate policies in support of SMEs; 2) the absence of sufficient public resources to support innovation and bring new products to market; 3) the inaccessibility of research centres for small firms hinders the growth and development of Campinas as a dynamic IT cluster. The researchers propose 15 specific actions to improve the competitiveness of SME technology firms in Campinas and in the cluster.

Introduction: The Emergence of an Entrepreneurial World

Entrepreneurship and the multitude and variety of entrepreneurs who are shaping the post-industrial global economy have become mainstream. The quest for new products and new processes ranges from microlending arrangements by organizations such as Accion and the Kenyan Women’s Finance Trust, to “cloud computing,” which is making a significant impact, in particular, on the health-care industry. These also include new firms known as “born global” enterprises whose first markets are not their home country, but the world (e.g. Skype), and large multinational stalwarts such as Walmart, Cemex, Volkswagen, and Telefonica whose entrepreneurial approach to sourcing, supply chain management, and logistics has become the industry standard.

Conclusion: Lessons Learned and Looking Forward

As the speed, scope, and depth of globalization intensify, all regions of the world are faced with daunting challenges. Latin America is no exception. Interdependence through technology, communications, human capital migration (particularly skilled labor), transportation, and cross-national commercial relations, whether by choice or necessity, is a dominant feature of the international landscape. Given the greater mobility of capital, technology, and human capital, the competition among developing regions in particular has become much greater in recent times.