nep-lam New Economics Papers
on Central and South America
Issue of 2015‒08‒30
five papers chosen by

  1. Innovation, Absorptive Capacity and Growth Heterogeneity: Development Paths in Latin America 1970–2010 By Fulvio Castellacci; Jose Miguel Natera
  2. A Latin lens on energy markets By Frank Wolak
  3. Export promotion and firm entry into and survival in export markets By Lederman,Daniel; Olarreaga,Marcelo; Zavala,Lucas
  4. The middle-income trap turns ten By Gill,Indermit S.; Kharas,Homi
  5. Spatio-temporal persistence of municipal rates of business start-ups in Chile By Mauricio Oyarzo; Gianni Romani; Miguel Atienza; Marcelo Lufin

  1. By: Fulvio Castellacci (TIK Centre, University of Oslo, Norway); Jose Miguel Natera (Universidad Metropolitana, Mexico)
    Abstract: The paper carries out an analysis of long-run development paths in Latin America in the period 1970-2010. We focus on three main dimensions – openness, industrial structure and innovation – and analyze how changes in these factors, and the specific combination of them adopted by each country, have affected its income per capita growth. We apply Johansen cointegration approach to time series data for 18 Latin American countries. The analysis leads to two main results. First, we show that Latin American countries have followed different growth trajectories depending on the combination of policies they have adopted to catch up. Secondly, we find a clear correspondence between policy strategies, on the one hand, and growth performance, on the other. Countries that have managed to combine imitation and innovation policy have experienced a higher rate of growth than those economies that have only made efforts to improve their imitation capability.
    Date: 2015–08
  2. By: Frank Wolak
    Abstract: Stanford University’s Frank Wolak looks at the pros and cons of Latin-American-style cost-based dispatch and pricing on short-term energy and operating reserve markets.
    Date: 2013–11–01
  3. By: Lederman,Daniel; Olarreaga,Marcelo; Zavala,Lucas
    Abstract: Surveys of export promotion agencies suggest that that they tend to focus on helping firms become exporters as a means to stimulate aggregate export growth. But the existing empirical evidence has paid little attention to the role of export promotion agencies in helping entry into exporting. This paper fills this gap with a panel of exporting and non-exporting firms from seven Latin American countries during the period 2006-2010. The results suggest that export promotion encourages exports mainly by helping firms enter into and survive in export markets. The impact on the intensive margin of exporting firms is not robust. This finding is consistent with export promotion helping reduce fixed rather than variable costs of exporting, which is to be expected if export promotion agencies help correct for market failures associated with information externalities.
    Keywords: E-Business,Tax Law,Export Competitiveness,Microfinance,Airports and Air Services
    Date: 2015–08–19
  4. By: Gill,Indermit S.; Kharas,Homi
    Abstract: Since we introduced the term ?middle-income trap? in 2006, it has become popular among policy makers and researchers. In May 2015, a search of Google Scholar returned more than 3,000 articles including the term and about 300 articles with the term in the title. This paper provides a (non-exhaustive) survey of this literature. The paper then discusses what, in retrospect, we missed when we coined the term. Today, based on developments in East Asia, Latin America, and Central Europe during the past decade, we would have paid more attention to demographic factors, entrepreneurship, and external institutional anchors. We would also make it clearer that to us, the term was as much the absence of a satisfactory theory that could inform development policy in middle-income economies as the articulation of a development phenomenon. Three-quarters of the people in the world now live in middle-income economies, but economists have yet to provide a reliable theory of growth to help policy makers navigate the transition from middle- to high-income status. Hybrids of the Solow-Swan and Lucas-Romer models are not unhelpful, but they are poor substitutes for a well-constructed growth framework.
    Keywords: Economic Theory&Research,Emerging Markets,Labor Policies,Inequality,Climate Change Economics
    Date: 2015–08–26
  5. By: Mauricio Oyarzo (Departamento de Economia, Universidad Catolica del Norte); Gianni Romani (Departamento de Administracion, Universidad Catolica del Norte); Miguel Atienza (Departamento de Economia, Universidad Catolica del Norte); Marcelo Lufin (Departamento de Economia, Universidad Catolica del Norte)
    Abstract: This work investigates the spatio-temporal persistence of municipal rates of business startups in Chile between 2005 and 2011, using the database of the Internal Revenue Service (SII). The analysis was made with descriptive statistical, non-parametric tests and econometric models. The results show persistent spatio-temporal clusters, representing favorable and unfavorable environments for entrepreneurship, as well as a high probability of any municipality remaining in the same cluster. The factors that explain persistence reveal distinct effects on start-up creation for each level of municipal entrepreneurship, which suggests the need for policies that take into account the spatial differences in entrepreneurial dynamism.
    Keywords: entrepreneurship, regional development, spatio-temporal persistence, spatial clusters
    JEL: M13 R11 R1
    Date: 2015–07

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