Skip to main content Accessibility help
×
×
Home

Should I stay or should I go? A comparative study of banking sector policies and the strategies of Central American business groups

  • Yuri Kasahara

Abstract

The article seeks to explain how policies affect business groups’ decisions to stay or leave a sector of activity in a liberalized economy. The article utilizes a comparative historical approach to explain how business groups in six Central American countries decided to enter, remain in or leave the banking sector. Using case studies of the main banks belonging to business groups in the region, the article seeks to identify how particular sequences of policies lead to the formation of two major strategies. A portfolio one, characterized by a short-term interest in the banking sector; and an organic one, in which the banking sector plays a more important role for the whole group. Looking at the impact of three policies (nationalization, privatization and liberalization), I show that previous nationalization had contributed to a dominant portfolio strategy in Costa Rica and El Salvador. The absence of nationalization favored the dominance of an organic strategy in Guatemala and Honduras. Additionally, the cases of Nicaragua and Panama are analyzed as examples of how other events, such as early internationalization and early liberalization, can favor a more mixed scenario.

Copyright

Corresponding author

Centre for Development and the Environment, University of Oslo, Norway, E-mail: yuri.kasahara@sum.uio.no

References

Hide All
Barbero, M. I. 2010. “Business history in Latin America: a historiographical perspective.” Business History Review 82: 555575.
Barbero, M. I. and Dávila, C. 2009. “Introduction: a view from Latin America.” Entreprises et Histoire 54: 615.
Bull, B. 2005. Aid, power, and privatization: the politics of telecommunication reform in Central America. Cheltenham, UK: Edward Elgar.
Bull, B. 2011. “Diversified business groups and the re-configuration of capitalism in El Salvador.” Paper presented at the Norlarnet Conference, November 12–13, Bergen.
Bull, B. and Kasahara, Y. 2012. “The Transformation of Central American Economic Elites: From Local Tycoons to Transnational Business Groups.” Paper presented at the seminar Los Grupos Económicos Centroamericanos Frente a la Transnacionalización: Entre Una Agenda de Sostenabilidad y del Capital Global, February 22, Heredia, Costa Rica.
Bulmer-Thomas, V. 1987. The political economy of Central America since 1920. Cambridge, UK: Cambridge University Press.
Carney, M. and Gedajlovic, E. 2002. “The co-evolution of institutional environments and organizational strategies: the rise of family business groups in the ASEAN region.” Organization Studies 23: 129.
Casaús-Arzú, M. E. 1992. “La Metamorfosis de las Oligarquías Centroamericanas.” Revista Mexicana de Sociología 54: 69114.
Chacón, D. 2011. “Ranking de Bancos, Aseguradoras y Puestos de Bolsa.” Revista Summa 203: 6687.
Chung, H. M. 2006. “Managerial ties, control and deregulation: an investigation of business groups entering the deregulated banking industry in Taiwan.” Asia Pacific Journal of Management 23: 505520.
Collier, R. B. and Collier, D. 1991. Shaping the political arena: Critical junctures, the labor movement, and regime dynamics in Latin America. Princeton, NJ: Princeton University Press.
Davila, C. and Miller, R. (eds.). 1999. Business history in Latin America: the experience of seven countries. Liverpool, UK: Liverpool University Press.
Delios, A. and Ma, X. 2010. “Diversification strategy and business groups.” In: Asli, T. H., Colpan, M. and James, R. (eds.), The Oxford handbook of business groups. Lincoln. Oxford, UK: Oxford University Press.
Dosal, P. J. 1995. Power in transition: the rise of guatemala's industrial oligarchy, 1871–1994. Westport, CT: Praeger.
Evans, P. 1979. Dependent development: the alliance of multinational, state and Local Capital in Brazil. Princeton, NJ: Princeton University Press.
Euraque, D. 1996. Reinterpreting the banana republic: region and State in Honduras, 1870–1972. Chapel Hill: The University of North Carolina Press.
Everingham, M. 2001. “Agricultural property rights and political change in Nicaragua.” Latin American Politics and Society 43 (3): 6193.
Falleti, T. 2005. “A sequential theory of decentralization: Latin American cases in comparative perspective.” American Political Science Review 99: 327346.
Granovetter, M. 1994. “Business groups and social organization.” In: Smelser, N. J. and Swedberg, R. (eds.), The handbook of economic sociology. Princeton, NJ: Princeton University Press.
Grugel, J. 1998. “State and business in neo-liberal democracies in Latin America.” Global Society 12: 221235.
Guillén, M. F. 2001. The limits of convergence: globalization and organizational change in Argentina, South Korea, and Spain. Princeton, NJ: Princeton University Press.
Herrera, M. 2007. “Competencia y Regulación de la Banca: El Caso de El Salvador.” Serie Estudios y Perspectivas de la Oficina de Cepal en México 68: 171. Retrieved from: http://www.eclac.cl/publicaciones/xml/4/27744/L727.pdf.
Hess-Araya, E. and Li-Kam, S. M. 1995. “Consideraciones para el surgimiento de una nueva alianza de poder en Costa Rica”. Ciencias Sociales 68: 3340.
Hoskisson, R. E., Johnson, R. A., Laszio, T. and White, R. E. 2005. “Diversified business groups and corporate refocusing in emerging economies.” Journal of Management 31: 941965.
Hughes, W. and Quinteros, I. 2000. Quien son los Dueños de Panamá? Panama City, PA: Imprenta Articsa.
Jones, G. and Colpan, A. M. 2010. “Business groups in historical perspectives.” In: Asli, T. H., Colpan, M. and James, R (eds.), The oxford handbook of business groups. Lincoln. Oxford, UK: Oxford University Press.
Khanna, T. and Yafeh, Y. 2007. “Business groups in emerging markets: paragons or parasites?Journal of Economic Literature 45: 331372.
Kim, H., Hoskisson, R. E., Tihanyi, L. and Hong, J. 2004. “The evolution and restructuring of diversified business groups in emerging markets: the lessons from Chaebols in Korea.” Asia Pacific Journal of Management 21: 2548.
Koch, C. J. and Guillén, M. F. 2001. “Strategy and structure in developing countries: business groups as an evolutionary response to opportunities for unrelated diversification.” Industrial and Corporate Change 10: 77113.
Jilberto, A. E. F. and Hogenboom, B. 2007. “Latin American Conglomerates in the neoliberal era: the politics of economic concentrations in Chile and Mexico.” In: Jilberto, A. E. F. and Hogenboom, B. (eds.), Big business and economic development: conglomerates and economic groups in developing countries and transition economies under globalization. New York: Routledge Press.
Langlois, R. 2010. “Economic institutions and the boundaries of business groups. In: Asli, T. H., Colpan, M. and Lincoln, James R. (eds.), The Oxford handbook of business groups. Oxford, UK: Oxford University Press.
Leff, N. 1978. “Industrial organization and entrepreneurship in developing countries: the economic groups,” Economic Development and Cultural Change 26: 661675.
Lefort, F. 2010. “Business groups in Chile.” In: Asli, T. H., Colpan, M., and Lincoln, James R. (eds.), The Oxford handbook of business groups. Oxford, UK: Oxford University Press.
Mahoney, J. 2001. “Path-dependent explanations of regime change: central america in comparative perspective.” Studies in Comparative International Development 36: 111141.
Maman, D. 2002. “The emergence of business groups in Israel and South Korea.” Organization Studies 23: 737758.
Meza, V. (ed.). 2007. Honduras: Poderes Fácticos y Sistema Político. Tegucigalpa, HN: Centro de Documentación de Honduras.
Monterrosa, G. and Lezcano, N. 2010. “Ranking Bancos.” Revista Estratégia y Negocios 131: 70106.
Paige, J. M. 1997. Coffee and power: revolution and the rise of democracy in Central America. Cambridge, MA: Harvard University Press.
Paniagua, C. 2002. “El Bloque Empresarial Hegemónico Salvadoreño.” Estudios Centroamericanos 57: 609694.
Rettberg, A. 2001. “The political preferences of diversified business groups: lessons from Colombia (1994–1998).” Business and Politics 3: 4763.
Rivera, E. and Rodríguez, A. 2008. “Competencia y Regulación en la Banca de Centroamérica y México: Un Estudio Comparativo.” In: Rivera, E. and Schatan, C. (eds.), Centroamérica y México: Políticas de Competencia a Principios del Siglo XXI. México, D. F. MX: CEPAL/Naciones Unidas.
Robinson, W. I. 2003. Transnational conflicts: Central America, social change, and globalization. London, UK: Verso.
Robles-Rivera, F. 2010. “Nuevos Espacios de Acumulación: Modelo de Ajuste Estructural en El Salvador y Costa Rica (1980–1999).” Revista de Ciencias Sociales de la Universidad de Costa Rica 128–129: 97117.
Rocha, J. L., Brown, E. and Cloke, J. 2011. “Of legitimate and illegitimate corruption: bankruptcies in Nicaragua.” Critical Perspectives on International Business 7: 159176.
Sánchez-Ancochea, D. 2006. “Development trajectories and new comparative advantages: Costa Rica and Dominican Republic under globalization.” World Development 34: 9961115.
Sánchez-Ancochea, D. 2008. “State and society: the political economy of DR-CAFTA in Costa Rica, the Dominican Republic, and El Salvador.” In: Sánchez-Ancochea, D. and Shadlen, K. C. (eds.), The political economy of hemispheric integration: responding to globalization in the Americas. New York: Palgrave Macmillan.
Schneider, B. R. 2004. Business politics and the state in twentieth-century Latin America. Cambridge, UK: Cambridge University Press.
Schneider, B. R. 2008. “Economic liberalization and corporate governance: the resilience of business groups in Latin America.” Comparative Politics 40: 379397.
Schneider, B. R. 2009a. “A Comparative political economy of diversified business groups, or how states organize big business.” Review of International Political Economy 16: 178201.
Schneider, B. R. 2009b. “Hierarchical market economies and varieties of capitalism in Latin America.” Journal of Latin American Studies 41: 553575.
Schneider, B. R. 2010. “Business groups and the state: the politics of expansion, restructuring, and collapse.” In: Asli, T. H., Colpan, M. and Lincoln, James R. (eds.), The oxford handbook of business groups. Oxford, UK: Oxford University Press.
Segovia, A. 2004. “Centroamérica Después del Café: El Fin del Modelo Agroexportador Tradicional y el Surgimiento de un Nuevo Modelo.” Revista Centroamericana de Ciencias Sociales 1 (2): 538.
Segovia, A. 2005. Integración Real y Grupos de Poder Económico en América Central: Implicaciones para el Desarrollo y La Democracia de la Región. San José, CR: Fundación Friedrich Ebert América Central.
Sojo, C. 1992. La Mano Visible del Mercado. San José, CR: CRIES/CEPAS.
Stanley, W. D. 1996. The Protection racket state: elite politics, military extortion, and civil war in El Salvador. Philadelphia, PA: Temple University Press.
Strachan, H. W. 1976. Family and other business groups in economic development: the case of Nicaragua. New York: Praeger Publishers.
Teichman, J. 1995. Privatization and political change in Mexico. Pittsburgh, PA: University of Pittsburgh Press.
Valdés, M. 1989. “Reformismo y Guerra: Una Evaluación de la Nacionalización Bancaria en El Salvador.” Revista Centroamericana de Administración Pública 16: 3962.
Vilas, C. M. 1992. “Family affairs: class, lineage, and politics in contemporary Nicaragua.” Journal of Latin American Studies 24: 309341.
Vogel, S. K. 1996. Freer markets, more rules: regulatory reform in advanced industrial countries. Ithaca, NY: Cornell University Press.
Williams, R. G. 1986. Export agriculture and the crisis in Central America. Chapel Hill: University of North Carolina Press.
Yiu, D. W., Lu, Y., Bruton, G. D. and Hoskisson, R. E. 2007. “Business groups: an integrated model to focus future research.” Journal of Management Studies 44: 15511579.
Zimbalist, A. and Weeks, J. 1991. Panama at the crossroads: economic development and political change in the 20th century. Berkeley: University of California Press.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Business and Politics
  • ISSN: -
  • EISSN: 1469-3569
  • URL: /core/journals/business-and-politics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed