Innovation strategies and employment in Latin American firms

By:	Crespi, Gustavo (Competitiveness and Innovation Division, Institutions for Development Department, Inter-American Development Bank) Zuniga, Pluvia (UNU-MERIT/MGSoG, University of Maastricht)
URL:	http://d.repec.org/n?u=RePEc:dgr:unumer:2012022&r=lam
This study examines the impact of innovation strategies on employment growth in four Latin American countries (Argentina, Chile, Costa Rica, and Uruguay) using micro-data for manufacturing firms from innovation surveys. Building on the model proposed by Harrison et al. (2008), we relate employment to three innovation strategies: make only (R&D), buy only (external R&D, licensing of patents and know-how, technical assistance, and other external innovation activities) and make and buy (mixed strategy). Firms that conduct in-house innovation activities ("make only") have the greatest impact on employment; the "make and buy" strategy comes in second. Similar results are found for small firms. These results highlight the importance of fostering in-house technological efforts not only for innovation per se, but also to promote growth in firm employment. The impact of "make only" strategies is greater in high-tech industries, whereas "make only" and "make and buy" have a similar impact on employment in low-tech industries. Finally, the study provides evidence of the mechanisms through which innovation strategies affect employment. The findings show that innovation strategies enhance technological innovation, but their impact differs between product and process innovation. Product innovation is mainly motivated by in-house technology investments, followed by mixed strategies, whereas process innovation is basically driven by "buy" strategies.
Keywords:	innovation, employment, external R&D, Latin America, innovation surveys
JEL:	O12

Do Middle Classes Bring Institutional Reforms?

By:	Loayza, Norman (World Bank) Rigolini, Jamele (World Bank) Llorente, Gonzalo (World Bank)
URL:	http://d.repec.org/n?u=RePEc:iza:izadps:dp6430&r=lam
We revisit the link between poverty, the middle class and institutional outcomes using a newly developed cross-country panel dataset containing detailed information on the distribution of income and expenditures. When the size of the middle class increases (measured as the proportion of people with income above 10 US Dollars a day in PPP terms), social policy on health and education becomes more active and the quality of governance regarding democratic participation and official corruption improves. This does not occur at the expense of economic freedom, as an expansion of the middle class also implies more market-oriented economic policy on trade and finance. The impact of a larger middle class appears to be more robust than those of lower poverty, lower inequality, or higher GDP per capita.
Keywords:	poverty, middle class, income, institutions, development
JEL:	D3

Social Policies or Private Solidarity?: The Equalizing Role of Migration and Remittances in El Salvador

By:	Acevedo, Carlos Cabrera, Maynor
URL:	http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-13&r=lam
This paper reviews the pattern of poverty rates and income inequality in El Salvador since the 1990s. It discusses some of the likely factors that explain the reduction in income inequality that has taken place in the country in the last decade, which paradoxically has coincided with the long period of economic stagnation that has followed dollarization since 2001. After examination of the available evidence, we conclude that this trend has been mainly due to the equalizing effect of migration and remittances (that is, a .private safety net. built around solidarity within families) rather than the distributive effect of public social expenditure or other public policies.
Keywords:	El Salvador; remittances; migration; inequality; poverty; labour market

Redistribution without Structural Change in Ecuador: Rising and Falling Income Inequality in the 1990s and 2000s

By:	Ponce, Juan Vos, Rob
URL:	http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-12&r=lam
This study examines the rise and fall in income inequality in Ecuador over the past two decades. Falling income equality during the 2000s partly coincides with the rise to power of a .new leftist. government, but the trend was already set early in the decade. The recent trend is mainly associated with a recovery from the country.s deep crisis of the late 1990s. The new leftist regime.s social transfer policies helped reduce inequality further, but the continuation of Ecuador.s primary export-based growth model and the lack of structural economic change do not augur for a more structural decline in inequality.
Keywords:	education, welfare, poverty, Ecuador

Macroeconomic Policies, Growth, Employment, and Inequality in Latin America

By:	Damill, Mario Frenkel, Roberto
URL:	http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-23&r=lam
This paper examines the macroeconomic policies and outcomes experienced by the Latin American economies during the period 1990-2010. Macroeconomic policies refer to exchange rates, monetary and aggregate fiscal policies, while macroeconomic outcomes, on the other hand, refer to the patterns of growth, inflation, employment, investment, balance of payments, and the evolution of external and public debts and international reserves. The analysis includes a discussion of the effects of macroeconomic outcomes on poverty rates. With regard to policy, the study examines the changes that took place in 1997-98, and then reviews the resulting new macroeconomic configuration that was established in 2002-03. This new configuration favoured the acceleration of output growth and employment creation, and contributed to reducing poverty rates.
Keywords:	Latin American economies, macroeconomic policies, economic growth, employment, poverty rates, inequality

Changes in Labour Market Conditions and Policies: Their Impact on Wage Inequality during the Last Decade

By:	Keifman, Saul N. Maurizio, Roxana
URL:	http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-14&r=lam
Labour market incomes have been a major contributor to the important fall in inequality in Latin America during the 2000s. Indeed, it was the main contributor in countries where inequality fell more dramatically. A proper understanding of the workings of the labour market is necessary to comprehend why inequality fell, what lies ahead of us and what we can do to achieve more equitable societies in Latin America. Social progress was real in the last decade but we should not overlook the structural deficits that still remain in Latin American labour markets. Inequality fell more dramatically in countries where formality rose faster and real minimum wages increased more significantly. Labour market institutions have a played positive role in reducing inequity in the last decade.
Keywords:	labour institutions, inequality, Latin America, minimum wage

Buenos Aires to Athens: The Road to Perdition

By:	Porzecanski, Arturo C.
URL:	http://d.repec.org/n?u=RePEc:pra:mprapa:37874&r=lam
Three sovereign defaults in the past decade have each inflicted losses of at least 70% on bondholders: Argentina, Ecuador, and now Greece. In each case, creditor rights and the rule of law were trampled, setting troubling precedents that are worrying investors involved in vulnerable European countries. In Argentina (in default since 2002), numerous arbitrary measures were taken that damaged the interests of investors; the debt relief that was demanded bore little relation to the country's capacity to pay; and court judgments and arbitral awards against the sovereign have been routinely ignored. Ecuador (2008-2009) stands as the clearest example of sovereign unwillingness to pay. Investors were blindsided, bullied, and then sacrificed as part of a personal and ideological vendetta on President Correa's part. Investor confidence in Greece was destroyed by persistently negative attitudes coming out of Berlin. The huge losses imposed on creditors were based on questionable estimates and judgments, and various troubling, expedient means were used to achieve the dubious ends. Chances are that the road to perdition for investors will soon be extended to some other capital in Europe.
Keywords:	Argentina; Ecuador; Greece; Debt; Default; Restructuring; Crisis
JEL:	F34