Macroeconomic Policy in Cuba

This chapter examines the evolution of macroeconomic policies in Cuba during the past 25 years. It analyzes the changes in fiscal policy from its wild gyrations in the early 1990s to the period of stability from 1994 to 2004, and to the crisis of 2008 and its sequel. It then examines the strategy of the Central Bank of Cuba and the tension between its anti-inflationary objective and its obligation to finance a substantial part of the fiscal deficit. It also emphasizes the need for new, modern instruments of monetary control, and the need to equip the central bank to become a lender of last resort. Finally, the chapter discusses the current multiple exchange rate system, its discriminatory nature, and its harmful effects on resource allocation, equity, and the interpretation of statistics.

A Structurationist Analysis of Differing Policies Oriented to the Pharmaceutical Industry

This chapter has two purposes closely related to each other. The first one is to analyze why countries that have similar characteristics and benefits to each other develop different strategies in terms of rules that regulate the intellectual property rights in the pharmaceutical industry. The second one is to analyze the factors that determine active participation in global governance processes with regards to the intellectual property rights of countries that are developing, specifically in the pharmaceutical industry. The study used the structurationist approach developed by John M. Hobson, and findings were tested by comparing the examples of two countries: Turkey and Brazil.

Entrepreneurs' Responses to Illegitimate Institutional Pressures in Monterrey, Mexico

The mass media can play an important role in capturing the dynamic between social groups and the institutional environment. To investigate entrepreneurs' responses to the impact of organized crime and violence on Small and Medium-Sized Enterprises (SMEs) in Monterrey, Mexico, a deductive Content Discourse Analysis (CDA) was developed. The sample was constructed by integrating international newspapers available in the database FACTIVA and Mexican newspapers from 2006 to 2012. The results made it possible to observe the dynamic between informal and formal institutions in the emergence of adaptation of SMEs' business model. The adaptations observed tend to respond to the change in the behavior of social groups in Monterrey, Mexico, as a consequence of organized crime and violence. This chapter explores this CDA.

Does Technology Adoption Matter for Economic Development?

The spread of new Information and Communication Technologies (ICTs) has been recognized worldwide. ICTs are broadly perceived as tools facilitating economic growth and development, especially in backward countries. They are easy and cheap to adopt, require minimum skills for effective use, and bring opportunities for disadvantaged societies. They enable education, knowledge dissemination and sharing, and processing and storing of all kinds of information. The existence of causal relationships between technology diffusion and general economy performance is highly probable. This chapter seeks empirical evidence in existing quantitative links between the process of Information and Communication Technologies (ICTs) adoption and dynamics of economic growth and development in Latin American countries. The authors consider ICTs diffusion patterns in Latin American countries, approximating the diffusion process by S-shaped curves. Afterwards, they aim to detect if there is any quantitative relationship between ICTs adoption dynamics and economic growth and development, and they estimate to what extend ICTs contribute to economic growth and development. The authors hypothesize on existing statistically significant and strong links between the two. They use panel data for Latin American economies from the years 1990-2011. All necessary data are derived from World Telecommunication/ICT Indicators Database 2012 (16th edition) and World Development Indicators 2012.

A Different Kind of Investor?

After decades of limited contact, China's influence in Latin America has soared in the early part of the 21st century. China's presence in Latin America holds potential for transforming regional economies in positive and negative ways. This chapter describes Chinese Foreign Direct Investment (FDI) in Latin America, explores its implications, and tests whether Chinese FDI differs from global FDI in Latin America regarding corruption and resource intensity. It finds that Chinese FDI is more closely associated with countries that are more resource-abundant and are ranked as more corrupt. This could have negative implications for Latin American countries and their development as China expands.

Inducascos S.A.

Inducascos S.A. was first established in 1998 in the city of Medellín, Colombia. After a decade of instability and financial bankruptcy due to lack of capital, scarce infrastructure, and insufficient labor not only in number but also in terms of the qualification level, Inducascos became the market leader in the manufacturing and commercialization of helmets in the Colombian market. Its ability to deal with the unstable local market and the fierce competition resulting from the entry of imported products has positioned Inducascos as the leading brand of motorcycle helmets. For the last decade, the company's strategy has focused on the internationalization of the manufacturing process and the updating of the commercial strategy in order to consolidate an attractive product portfolio, which manages to offer differentiated products for a segmented market at competitive prices. This chapter explores Inducascos S.A.

Technological Change and Innovation in Latin American Emerging Economies

Innovation and technology, in appropriate business environments, are considered improvement and survival tools directly related to the establishment of competitive advantages. However, this must be accompanied by a growing economy, and, in some cases, governmental policies that encourage the industry. This chapter inquires about several factors involved in the innovation and technological change of the pork industry in Antioquia, Colombia, based on original research results and other contributions of the authors. The managerial assumption is simple: free trade and strategic moves of the biggest competitors indicate that Small- and Medium-Sized Enterprises (SMEs) in the pork industry must accelerate their technological change via innovation management by addressing different factors that are hindering the establishment of competitive advantages. The authors offer a possible path of action from a management perspective to support that the industry will form an oligopoly should innovation management not occur.

Taxpayers' Attitudes towards Tax Evasion in Latin American Countries

The weight of the state in economic and social life is very important even if it might differ from country to country. The state provides particular public services and needs to the various funding sources to provide these services. Taxes constitute the largest share of financial sources needed by the state to operate effectively. However, taxes are often not welcomed by taxpayers, creating the unwanted behavior of tax evasion. The purpose of this chapter is to reveal the tax structures of Latin American countries and to examine tax morale as an important determinant in shaping the attitudes of taxpayers in Latin America. This chapter shows the most important component of tax revenues in Latin American countries constitutes consumption taxes instead of income taxes, in contrast to developed regions such as those in OECD countries. It shows the tax structure in Latin American countries reflects the typical tax structure in developing countries. It is also observed that average tax morale is higher in South American countries, such as Venezuela, Paraguay, and Argentina, than in other areas, although it has a changing property over time. Moreover, the chapter shows tax morale is associated with financial indicators (satisfaction with income, the present economic situation, income distribution, and the functioning of the market economy), policy indicators (satisfaction with democracy, confidence with government), and demographic indicators (age, education).

Technology-Intensive Suppliers as a Key Element for Structural Change in Latin America

The current increase of commodity prices prompts the question regarding the extent to which the growth of primary industries is used as a basis of industrial development. Empirical evidence suggests the development of Technology-Intensive Suppliers (TIS) has played an important role in the industrialization process of the Nordic countries, Canada, and Australia. The development of local TIS may contribute to both reinforcing the industrial base and supporting structural change in developing countries. Therefore, it may provide a way to advance from natural resource dependence towards knowledge-based industrial activities. The TIS products are created under tailor-made concepts, giving solutions to their customers. TIS use knowledge and customer information to create innovation. These firms enhance value chains improving customer's competitive advantages (Dornberger & Torres, 2006). The relationship between the primary sector and its suppliers of technology can be seen as a backward linkage. Sectors with linkages of this kind use inputs from other industries (Hirschman, 1958). Hence, a fundamental goal of research in the context of developing countries is to understand the development of TIS and analysis of their improvement as a result of entrepreneurship intervention. This chapter covers the relevance of TIS firms in developing countries. TIS companies are frequently labeled as Micro-, Small-, and Medium-Sized Enterprises (MSMEs). In conclusion, the findings highlight the need to pay more attention to TIS organizations in developing economies. In Latin America, TIS firms contribute to the employment and diversification of the economic structure of the region through value-added products and services.

Ideologies and Practices of Management in Latin America

This chapter seeks to explain the common features of the ideologies and practices of management in Latin America. Using an institutional approach, the authors show that specific historical, social, and economic conditions have shaped a certain way of management unique to this region. Latin America´s colonial heritage and its contemporary institutions have led to a hybrid managerial ideology that defines how firms interact with their local and global environments.