Continuity and Change in Latin America and Spain
Edited by Paloma Fernández Pérez and Andrea Lluch
Chapter 2: State, institutions and impact of economic policies on the historical evolution of family businesses in Spain and Latin America
The historical structure of an economic system based on capitalism has had various formal rhythms and characteristics in different parts of the world. The institutional framework constitutes one of the main determinants of the differences that have molded modern economic growth. Literature has shown repeatedly how the characteristics of institutions and their stability have set the pace (Acemoglu and Robinson, 2012). Along with this, it is worth noting that growth comes from companies, the principal players in economic progress. It is the activity of the firms, therefore, that gives added value to production. For a good part of the twentieth century, the large corporations stood out as a virtuous system: thousands of workers together, hundreds of managers and thousands of shareholders who gave their capital to an executive board that sought to make the company grow, to raise profits and distribute dividends, permanently improving profitability. The large firm, originating in the United States, expanded internationally as multinationals. After World War II, large internationalized corporate firms were seen as the architects of growth; while establishing themselves on the stock markets and in corporate finance as the ideal mechanism for providing capital to companies, they presented the modern limited company as being the best option for guaranteeing a permanent capacity for growth (Chandler, 1977).
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