Does The Investment Climate Matter?: Microeconomic Foundations of Growth in Latin America

Although the Latin American region's growth rates are at a three decade high, they have been historically disappointing in relative terms, which cannot be dissociated from the microeconomic environment in which firms operate. Policy makers may need to complement their focus on macroeconomic stability with an increased emphasis on microeconomic reforms. By providing empirical evidence linking actual firm performance to shortcomings in Latin America's investment climate, the book discusses policies that could have a significant impact on firm productivity by improving the environment in which firms invest and operate.

Table of Contents:
Acknowledgements PART I: DO WE NEED ANOTHER STUDY OF ECONOMIC PERFORMANCE IN LATIN AMERICA AND THE CARIBBEAN? Introduction Where do we go from here? A first pass at the investment climate Conclusions PART II: THE INVESTMENT CLIMATE IN LATIN AMERICA ntroduction How do firms perceive the key investment climate constraints to growth? Data and econometric methodology Estimation results Merging Enterprise Survey and household data Summary and conclusions PART III: WHAT WOULD BE THE IMPACT OF A BETTER INVESTMENT CLIMATE FOR ALL? Introduction Potential productivity gains under alternative scenarios Results Country detail Are there any differences by firm size? Are there potential gains for wages Conclusions PART IV: BEHIND THE INVESTMENT CLIMATE. BACK TO BASICS: DETERMINANTS OF CORRUPTIONI. Introduction A conceptual framework Results Robustness checksDeterminants of regulatory compliance Conclusions PART V: WHAT ARE THE DETERMINANTS OF FINANCIAL ACCESS IN LATIN AMERICA? Introduction Data Descriptive statisticsRegression results Summary and conclusions PART VI: PRODUCTIVE INNOVATION: THE ROLES OF THE INVESTMENT CLIMATE AND R&D EXPENDITURES I. Introduction A model of productive innovation Data Is R&D related to productive innovation? The role of the investment climate Conclusions PART VII:EXPORTER PREMIUMS Introduction Exporter premiums: what do we know? From exports to wages: evidence from firm level data in Argentina Explaining output differentials between exporters and non exporters in a small country Conclusions and policy implications

About the Author :
PABLO FAJNZYBLER is senior economist in the Chief Economist's Office of the Latin America and Caribbean region of the World Bank. Previously, he worked at the Bank's Finance and Private Sector Development Department and at its Development Economics Research Group. He has published in various professional journals on a variety of development topics, including the economic impact of workers' remittances, the dynamics of micro-enterprises in developing countries, the impact of international trade on labor demand, and the economic causes of violent crime. He has also contributed to publications on informality and the determinants of economic growth in Latin America. JOSE LUIS GUASCH is Senior Regional Advisor for Latin America and the Caribbean Region for Regulation and Competitiveness at the World Bank and Professor of Economics, University of California, San Diego. HUMBERTO LOPEZ is Lead Economist in the Central America Management Unit of the World Bank's Latin America and Caribbean region