Juan Federico

Entrepreneurship, Economic Mobility, and Entrepreneurial Propensity: A Regional View Based on the Analysis of Selected Latin American Countries

Using household surveys from Argentina, Brazil, Peru, Ecuador, and El Salvador, this paper assesses the contribution of entrepreneurship to socioeconomic mobility and to understand the main variables associated with entrepreneurial propensity in selected Latin American countries. It is found that, at the aggregate regional level, income mobility is rather modest and that entrepreneurs do not outperform the rest of the population. However, entrepreneurs tend to perform as well as or better than non-entrepreneurs in countries where relative income mobility is moderate. In countries where relative income mobility is rather low, entrepreneurs tend to show less income mobility. Entrepreneurial propensity is rather modest, at 10 percent of the population. University graduates show the highest propensity in most of the countries studied, while women and young people were found to have the lowest entrepreneurial propensity.

Business Performance in Young Latin American Firms

This chapter offers new empirical evidence on the performance of young firms in a group of selected Latin American countries. The findings confirm their heterogeneous nature as well as their performance, highlighting the need to avoid generic and uniform strategies that assume narrow definitions of policy targets. A new taxonomy of young firms, according to their growth rates and size, allow us to identify some segments of dynamic young SMEs that are more productive than mature firms, and which could help close the productivity gap. Regression results confirm the negative association between growth rates and initial size, suggesting the need for growth in order to overcome the disadvantages associated with their limited scale during the initial stages of the business lifecycle. They also point out the importance of facilitating access to relevant “know how” and “know who” as well as removing the financial and regulatory constraints.

Dynamic Entrepreneurship in Emerging Countries: Main Findings from a SystemicPerspective

Numerous studies reveal the importance of dynamic new firms in the economic development. Studying the conditions that favor the development and growth of such firms is thus a key issue for developing and emerging countries. The aim of this paper is to propose and apply a systemic approach to the study of the existing conditions for the creation and development of new dynamic firms in emerging countries. The methodology consists of the creation and analysis of the Index of Systemic Conditions for Entrepreneurship (Indice de Condiciones Sistemicas para el Emprendimiento, ICSE Prodem), which allows the identification of the main strengths and weaknesses of these countries. The index is based on the Entrepreneurial Development System Framework (Kantis et al., 2002 and 2004), which considers firm creation as a systemic phenomenon, given the different factors that affect the creation, development, and growth processes of dynamic firms.