- 24 Mar 2020
- Working Paper Summaries
Free Riding in Loan Approvals: Evidence From SME Lending in Peru
Using data from a large Peruvian bank trying to expand credit access to small and medium enterprises, this study shows that competing lenders use one another’s loan approvals as an input into their own approval process. Such “free riding” has great impact on market outcomes and might warrant policy intervention.
- 17 Oct 2019
- Working Paper Summaries
Persuasion by Populist Propaganda: Evidence from the 2015 Argentine Ballotage
This paper studies data generated prior to the 2015 Argentine presidential ballotage, when a government propaganda campaign was used to attack the opposition candidate and influence voter preferences. Results show the propaganda was persuasive.
- 30 Sep 2019
- Working Paper Summaries
Comments on Macri's Macro by Federico Sturzenegger
Rafael Di Tella analyzes a paper by Federico Sturzenegger, the Governor of the Central Bank of Argentina under President Mauricio Macri, detailing the country’s efforts to stabilize the economy following 12 years of a populist administration.
- 09 Apr 2019
- Working Paper Summaries
Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia
Using data from Colombia’s second-largest city, Medellín, this study tests the relationship between formal employment and participation in crime at the individual level. Among the findings, subsidies for health care had the unintended consequence of amplifying gang activity. Results shed light on deterring criminality through improving access to formal sector employment.
- 20 Sep 2018
- Cold Call Podcast
Did Entrepreneur Ernesto Tornquist Help or Hurt Argentina?
Geoffrey Jones examines the career of Ernesto Tornquist, a cosmopolitan financier considered to be the most significant entrepreneur in Argentina at the end of the 19th century. Open for comment; 0 Comments.
- 17 Sep 2018
- Working Paper Summaries
The Impact of Penalties for Wrong Answers on the Gender Gap in Test Scores
Multiple-choice questions on standardized tests are widely seen as objective measures of student ability, but the common practice of assessing penalties for wrong answers may generate gender bias. This study documents the impact of a policy change that removed penalties for wrong answers on the national college entry exam in Chile. This simple change reduced the gender gap in test performance by 9 percent.
- 15 Mar 2018
- Working Paper Summaries
Targeted Price Controls on Supermarket Products
Governments sometimes consider targeted price controls when popular goods become less affordable. Looking at price controls in Argentina between 2007 and 2015, this study’s findings suggest that new technologies like mobile phones are allowing governments to better enforce targeted price control programs, but the impact of these policies on aggregate inflation is small and short-lived.
- 29 Jan 2018
- Book
How 'Teaming' Saved 33 Lives in the Chilean Mining Disaster
Teams composed of people from across expertise areas can create solutions beyond what any one agency can deliver, says Amy Edmondson. Just ask several dozen Chilean workers rescued from a mine collapse. Open for comment; 0 Comments.
- 15 Sep 2017
- Working Paper Summaries
Debt Redemption and Reserve Accumulation
This study examines how reserve accumulation affects governments’ decisions to default. The analysis assumes that countries can accumulate reserves and borrow internationally using their own currency. Results suggest that the optimal level of international reserves is fairly large because their cost is mitigated by valuation-smoothing gains. The model matches some features of Brazil’s economic fluctuations.
- 09 Mar 2017
- Cold Call Podcast
IDEO is Changing the Way Managers Think About Thinking
IDEO’s human-centered design thinking is a systematic approach used to help create new products and services. Professor Ryan Buell explores this process as a leading movie cinema chain in Peru rethinks the movie-going experience. Open for comment; 0 Comments.
- 01 Aug 2016
- Working Paper Summaries
The Costs of Sovereign Default: Evidence from Argentina
For several decades, one of the most important questions in international macroeconomics has been “why do governments repay their debts?” This study provides evidence that a sovereign default significantly reduces the value of domestic firms. Foreign-owned firms, exporters, banks, and large firms are particularly hurt more by increases in the probability of sovereign default.
- 27 Jun 2016
- Working Paper Summaries
Fiscal Rules and Sovereign Default
As they catch up to developed ones, emerging countries tend to overborrow and often default on their debt. This study by Laura Alfaro and Fabio Kanczuk analyzes the welfare gains from alternative fiscal rules, finding the gains economically important. What is more, a simple, easily contractible threshold rule can generate gains virtually as high as the optimal rule.
- 08 Mar 2016
- Research & Ideas
Solving an Economic Mystery Surrounding Argentina and Chile
At the dawn of the twentieth century, Argentina was one of the richest countries in the world. In the twenty-first century, it is struggling, its economy eclipsed by Chile. A new book by Geoffrey Jones and Andrea Lluch helps explain the “Argentina Paradox” and the influence of globalism. Open for comment; 0 Comments.
- 21 Jan 2016
- Working Paper Summaries
The Globalization of Angel Investments: Evidence across Countries
Examining a cross-section of 13 angel groups who considered transactions across 21 countries, this study finds that angel investors have a positive impact on the growth of the firms they fund, their performance, and survival, while the selection of firms that apply for angel funding varies across countries.
- 28 Sep 2015
- Research & Ideas
Six Lessons from Mobile Money Ventures in Developing Countries
Improving access to financial services for the poor in developing countries seems an unmet market need. So why are so many mobile money efforts failing? Rajiv Lal says the problem begins with Marketing 101. Open for comment; 0 Comments.
- 15 May 2015
- Research & Ideas
Kids Benefit From Having a Working Mom
Women whose moms worked outside the home are more likely to have jobs themselves, are more likely to hold supervisory responsibility at those jobs, and earn higher wages than women whose mothers stayed home full time, according to research by Kathleen McGinn and colleagues. 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.
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.