Samuel Pienknagura

Latin American entrepreneurs : many firms but little innovation

Entrepreneurship is a fundamental driver of growth, development, and job creation. While Latin America and the Caribbean has a wealth of entrepreneurs, firms in the region, compared to those in other regions, are small in size and less likely to grow or innovate. Productivity growth has remained lackluster for decades, including during the recent commodity boom. Enhancing the creation of good jobs and accelerating productivity growth in the region will require dynamic entrepreneurs. This book studies the landscape of entrepreneurship in Latin America and the Caribbean. Utilizing new datasets that cover issues such as firm creation, firm dynamics, export decisions, and the behavior of multinational corporations, the book synthesizes the results of a comprehensive analysis of the status, prospects, and challenges of entrepreneurship in the region. Useful tools and information are provided to help policy makers and practitioners identify policy areas governments can explore to enhance innovation and encourage high-growth, transformational entrepreneurship.

El emprendimiento en America Latina : muchas empresas y poca innovacion

Entrepreneurship is a fundamental driver of growth, development, and job creation. While Latin America and the Caribbean has a wealth of entrepreneurs, firms in the region, compared to those in other regions, are small in size and less likely to grow or innovate. Productivity growth has remained lackluster for decades, including during the recent commodity boom. Enhancing the creation of good jobs and accelerating productivity growth in the region will require dynamic entrepreneurs. Latin American Entrepreneurs: Many Firms but Little Innovation studies the landscape of entrepreneurship in Latin America and the Caribbean. Utilizing new datasets that cover issues such as firm creation, firm dynamics, export decisions, and the behavior of multinational corporations, the book synthesizes the results of a comprehensive analysis of the status, prospects, and challenges of entrepreneurship in the region. Useful tools and information are provided to help policy makers and practitioners identify policy areas governments can explore to enhance innovation and encourage high-growth, transformational entrepreneurship.

Better neighbors : toward a renewal of economic integration in Latin America

In a clear break from its past, Latin America and the Caribbean (LAC), particularly South America, experienced a growth spurt with equity during the first decade of the 21st century. One policy area that has moved back to center stage is regional integration. Indeed, since at least the 1960s, LAC has experimented with various forms of regional integration with the hope that fostering regional economic ties can yield the type of economic success that the region has long sought. The current push toward regional integration has been influenced by the success of the East Asia and Pacific (EAP) region, where intraregional trade, exports to the rest of the world, and incomes have risen together as the region continues to catch up to the income levels of the United States. The goal of leveraging formal trade arrangements to accelerate growth is evident in many of the trade agreements that are in place in the region. This report revisits the concept of OR and presents evidence supporting the idea that a revitalized OR strategy can contribute to growth with stability by exploiting the complementarities between regional and global economic integration. It presents a five pronged strategy, including: (i) reducing external most-favored-nation (MFN) tariffs; (ii) deepening economic integration between South America and Central and North America; (iii) harmonizing rules and procedures governing the exchange of goods, services, and factors of production; (iv) stepping up efforts to reduce LAC’s high trade costs; and (v) integrating labor and capital markets in the Americas. The report draws upon two prominent strands of economic theory. The first is the idea that the gains from trade depend on differences between countries. The second is the idea that trade facilitates learning, either through the experience of exporting or from the exposure to new products and ideas that are embodied in imports.

Latent trade diversification and its relevance for macroeconomic stability

Traditional measures of trade diversification only take into account contemporaneous export baskets. These measures fail to capture a country’s ability to respond to shocks by allocating factors of production into activities for which it has already paid the fixed costs associated with exporting. This paper corrects for the shortcoming of traditional measures of diversification by introducing a novel measure of trade diversification—latent diversification—and proposes a proxy to measure latent diversification, which is calculated by taking into account the entire history of a country’s exports. The paper shows that the observed gaps between traditional measures of diversification and the proposed proxy of latent diversification are sizeable; countries hold latent export baskets that are, on average, three times as large as their average contemporaneous export basket, and these gaps are largest for poor and small countries. Moreover, latent diversification is an important determinant of volatility—more diversified latent export baskets are associated with lower terms of trade volatility and, subsequently, lower GDP per capita volatility, even after controlling for the degree of contemporaneous export diversification and other trade and country characteristics. The latter result, together with the disproportionately large latent baskets relative to contemporaneous baskets observed in poor and small countries, suggests that latent diversification is an important vehicle toward stability in countries that face barriers in building diversified contemporaneous export baskets.