
- 22 Aug 2018
- Working Paper Summaries
Sustainability and Green Business in Latin America During Globalization Waves
Capitalism has created much wealth, but at the cost of massive ecological destruction. This has been particularly severe in Latin America over the past century. Yet the last three decades have also seen a wave of businesses across sectors ranging from beauty to eco-tourism aimed at greater sustainability.

- 21 May 2018
- Working Paper Summaries
Business, Governments, and Political Risk in South Asia and Latin America Since 1970
This study shows how perceptions of political risk by business leaders in emerging markets have differed between regions. For Latin Americans, macroeconomic and policy turbulence were the biggest sources of risk. For South Asians, excessive bureaucracy was the biggest source of risk. The study is based on a unique Harvard Business School oral history database.

- 05 Dec 2017
- Research & Ideas
What We've Learned from 101 Entrepreneurs in Emerging Markets
Harvard Business School’s project exploring the evolution of business leadership in emerging economies has reached an important milestone. Project leaders Geoffrey Jones and Tarun Khanna discuss what's been learned from the Creating Emerging Markets study so far. Open for comment; 0 Comments.

- 12 Oct 2017
- Cold Call Podcast
Telemundo: The Fastest Growing TV Network in the United States
Telemundo is the fastest-growing television network in the United States, but Chairman Cesar Conde must attract millennials to the fold. In this podcast, Henry McGee discusses Telemundo's David and Goliath rise. Open for comment; 0 Comments.

- 11 Oct 2017
- Working Paper Summaries
Crime and Violence: Desensitization in Victims to Watching Criminal Events
Findings from an experiment show that victims of crimes become desensitized to violence in biological and cognitive ways. These results may help explain a troubling contradiction in Latin America: rising crime along with decreasing public concern about it. As the rate of crime victimization increases, a larger group of the population shares this increased desensitization.

- 18 Aug 2017
- Working Paper Summaries
Emerging Markets and the Future of Business History
This paper argues that there are important commonalities about the business history of countries across Africa, Asia, and Latin America despite differences between countries and within regions of each country. It is possible to discern a distinctive body of scholarship different from that on the West.
- 27 Feb 2017
- Research & Ideas
Reputation is Vital to Survival in Turbulent Markets
Reputation and resilience are key ingredients that determine whether companies will survive tumultuous markets, according to a new paper by Geoffrey Jones, Tarun Khanna, Cheng Gao, and Tiona Zuzul. Open for comment; 0 Comments.
- 23 Nov 2015
- Book
The Historian Who Came in from the Cold
While much has been written about the conflict between the United States and the Soviet Union during the Cold War, Jeremy S. Friedman’s Shadow Cold War: The Sino-Soviet Competition for the Third World is the first book to explore in detail the significance of the “Second Cold War” that China and the Soviet Union fought in the shadow of the communist and capitalist struggle. Open for comment; 0 Comments.

- 03 Nov 2014
- Working Paper Summaries
Adding Value Through Venture Capital in Latin America and the Caribbean
The process of value creation starts with the choice of a promising company, extends through the structure of the investment and into the deal management process, and ends as the venture capitalist positions the company for an exit to a situation where it can continue to grow. In all regions, value creation plays an important role in every venture capital investment. Given the relative youth of the industry in Latin America and the Caribbean (LAC), the issue of value addition is particularly critical. In this paper the authors draw on scholarship, industry statistics, and interviews with six LAC fund managers. They also place the material in the context of their combined 56 years of experience studying the VC industry in order to describe the challenges facing fund managers in value creation. The paper concludes with nine best practices that should be especially helpful in LAC as these economies develop. Key concepts include: There are nine best practices for creating value in portfolio companies. Some of them apply to the internal operations of the VC firm while others address methods through which the fund managers interact with the portfolio companies. An unwillingness to risk failure restrains LAC's innovative and entrepreneurial culture. Entrepreneurs in the LAC region are less familiar with best practices in business, such as reaching beyond family and friends for investors in their companies, and most are new to the expectations of active, equity-owning investors. Situations vary greatly between countries. What works in one LAC country may not succeed in another, forcing fund managers to be particularly flexible and creative to add value in their portfolio companies. Closed for comment; 0 Comments.

- 30 Sep 2014
- Working Paper Summaries
The Real Effects of Capital Controls: Financial Constraints, Exporters, and Firm Investment
The massive surge of foreign capital to emerging markets in the aftermath of the global financial crisis of 2008-2009 has led to a renewed debate about the merits of international capital mobility. To stem the flow of capital and manage the attendant risks, several emerging markets have recently imposed taxes or controls to curb inflows of foreign capital. The case for capital controls usually rests on measures designed to mitigate the volatility of foreign capital inflows. However, controls also have an implicitly protectionist aspect aimed at maintaining persistent currency undervaluation. In this paper the authors investigate the effects of capital controls on firm-level stock returns and real investment using data from Brazil. Brazil is important because it has taken center stage as a country that has implemented extensive controls on capital flows between 2008 and 2012. Among the authors' key findings, real investment at the firm level falls significantly in the aftermath of controls. Overall, capital controls can increase market uncertainty and reduce the availability of external finance, which in turn can lower investment at the firm level. Capital controls disproportionately affect small, non-exporting firms, especially those more dependent on external finance. Key concepts include: Capital controls policy measures range from large-scale efforts to reduce the volatility of foreign capital inflows to a protectionist stance on maintaining the competitiveness of the external sector. The intended purpose of controls notwithstanding, evidence in this paper suggests that capital controls can increase market uncertainty and reduce the availability of external finance, which in turn can lower investment at the firm level. Controls affect small, non-exporting firms most, especially those more dependent on external finance. Closed for comment; 0 Comments.
- 13 Jun 2014
- Op-Ed
World Cup Soccer: 770 Billion Minutes of Attention
FIFA stands to generate $23 billion in revenue from World Cup soccer over the next few weeks. Clearly the organization understands "Attention Economics," says marketing expert Thales Teixeira. Open for comment; 0 Comments.
- 28 May 2014
- Research & Ideas
Building Histories of Emerging Economies One Interview at a Time
Much of modern business history has been written on experiences in the United States, Europe, and Japan. Now, the unheard stories of emerging markets in Africa, Asia, and Latin America are being told on a new website by the Business History Initiative. Open for comment; 0 Comments.
- 25 Apr 2014
- Research & Ideas
To Pay or Not to Pay: Argentina and the International Debt Market
Argentina's escalating financial crisis seems rocketing toward disaster. The fix? Finance Professor Laura Alfaro, who served as Minister of National Planning and Economic Policy in Costa Rica, recommends a radical solution sure to anger banks and fund managers: absolute sovereign immunity, Open for comment; 0 Comments.
- 15 Apr 2014
- Research & Ideas
Calderón: Economic Arguments Needed to Fight Climate Change
Former President of Mexico Felipe Calderón says the United States Congress and Chinese coal plants are the biggest obstacles to fixing climate change. Open for comment; 0 Comments.
- 01 Apr 2014
- Research & Ideas
When Do Alliances Make Sense?
Analyzing drilling leases in the Gulf of Mexico, John Beshears explores a question as old as business itself: When does it pay to make an alliance? Open for comment; 0 Comments.
- 19 Mar 2013
- First Look
First Look: March 19
When daily deals misfire on merchants ... Lessons of war for negotiators ... The unexpected effect of electronic monitoring of criminals. Closed for comment; 0 Comments.

- 14 Mar 2013
- Working Paper Summaries
No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax
This research investigates the effectiveness of the Value Added Tax in facilitating tax enforcement and sheds light on the role of information and third-party reporting for taxation. Drawing on results from two field experiments with over 400,000 Chilean firms, it provides evidence for the self-enforcing power of the paper trail in the VAT and for spillovers in tax enforcement through firms' trading networks more generally. The findings also show that while the VAT paper trail seems to be highly effective in Chile overall, the mere existence of a VAT system, in the absence of credible deterrence, does not lead to self-enforcement. Results have implications for public finance in developing countries and for tax policy in general. Key concepts include: A significant part of the higher evasion among smaller firms may be driven by a weaker paper trail. Forms of taxation such as the VAT, which leave a stronger paper trail and thereby generate more information for the tax authority, provide an advantage for tax collection over other forms of taxation, such as a retail sales tax, where this is not the case. Increasing the audit probability of firms suspected of evasion generates spillovers up the VAT paper trail that lead to an increase of their suppliers' tax payments. This suggests that tax authorities should take spillovers into account, when choosing which firms to audit. Closed for comment; 0 Comments.

- 30 Jan 2013
- Working Paper Summaries
These Are the Good Old Days: Foreign Entry and the Mexican Banking System
In this paper, the authors take on an aspect of contract design that is fundamental to explain economic development and financial stability. They study the incentives contained in the "partnership" contract between bankers, the government, depositors, and bank shareholders, and examine how the incentives that come out of that contract explain the volatility of the banking system. The main insight is that bankers in developing countries with weak property rights demand rents (such as high barriers to entry) and lax regulation, as a way to compensate them for the political risk they face of being expropriated by the government or used for policy objectives (for example, if the government forces banks to buy its debt). Depositors, on the other hand, demand deposit insurance in case bankers are reckless, while minority shareholders demand high returns to compensate for the risk of insider lending or reckless behavior on the part of bankers. Then, the combination of high barriers to entry, lax regulation, and deposit insurance induces bankers to take on more risks to try to maximize their rents, and does not encourage depositors and minority shareholders to monitor bankers either (as the government limits downside risk for them). This dynamic, in the case of Mexico, led to frequent banking crises between the 1970s and the 1990s. This was the case until 1997, when the government allowed foreign bankers take over the largest domestic commercial banks and improved the monitoring of banks. This increased the stability of the system. There has not been a crisis since then, partly because of improvements in regulation and partly because foreign bankers have been more conservative, not only because they have standardized procedures to deal with risk but also because they are closely monitored by their parent banks abroad. Key concepts include: Stability in the Mexican banking from the 1920s through the 1960s came at a price: Commercial banks could shift risk to government-owned development banks and hence to taxpayers. From the 1970s until 1997, the Mexican banking system was extraordinarily unstable. This was due to the tenuous partnership between the Mexican government and Mexico's bankers. These days, Mexico's foreign bankers have much to lose and little to gain from being opportunistic partners. When the government opened the market, it reformed accounting standards. Mexico's foreign bankers are subject to much greater oversight. Foreign bankers have protections against the Mexican government that Mexican bankers do not have. Regardless of their national origin, Mexico's bankers can no longer be expropriated with the stroke of a pen. Closed for comment; 0 Comments.

- 28 Jun 2012
- Working Paper Summaries
Leviathan in Business: Varieties of State Capitalism and their Implications for Economic Performance
State capitalism, the widespread influence of the government in the economy, still looms large in developed and developing countries after over two decades of extensive state reform and privatization. Research by Aldo Musacchio and Sergio G. Lazzarini documents the extent and reach of state capitalism around the world and explores the economic implications of these new forms of state capitalism. There are three key arguments: First, state capitalism in the twenty-first century combines majority ownership of state-owned enterprises with a hybrid form that includes minority equity investments as well as other forms of support for private firms (such as subsidized loans). Second, all of those forms are present around the world, both in rich and poor countries, and in most cases they co-exist. Although some countries appear to have a prevalence of the minority investor mode while other countries emphasize the majority mode, in most cases the two modes jointly occur. Third, the emergence of those modes is explained by a host of environmental, political, and historical factors; and the economic performance of each mode depends on certain contingencies that should affect their benefits and costs, such as the economic distortions that they may generate. Key concepts include: The form of state capitalism prevailing in the twenty-first century is different from that observed in the second half of the twentieth century. Governments, particularly in emerging markets, have justified the rise of such forms of hybrid capitalism as a way to solve market failures. Private companies, in contrast, see the rise of new state-owned enterprises, firms with minority government ownership, and private companies backed by loans of development banks as threats. Whether forms of state capitalism are regarded as benign or pernicious, very little has been known about these new forms of government intervention. Questions remain about the various institutional mechanisms by which states exercise control, why state capitalism reemerged and in which form, and its effects on both firm performance and state governance. Closed for comment; 0 Comments.
Restarting Under Uncertainty: Managerial Experiences from Around the World
A survey of 50 companies across countries and industries reveals business leaders are hard at work adapting to the COVID threat. Research by Raffaella Sadun and colleagues. Open for comment; 0 Comments.