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We began this book with two central questions: What is behind the weak performance in Latin America and the Caribbean (LAC)? Why have other regions been able to develop so much more rapidly than LAC? This book goes beyond traditional macroeconomic analyses, investigating the factors preventing faster productivity growth based on the study of fi rm dynamics in the region. One common argument is that productivity gains may be the result of the reallocation of resources from less productive sectors and fi rms to more productive ones due to competition and (Schumpeterian) processes of creation and destruction. However, another important source of productivity growth is related to fi rm improvements in terms of better organization and production methods, new products, learning, and capability development.

The long-run economic performance of Latin America has been unsatisfactory especially in comparison with other emerging economies, which have been able to "catch up" with developed countries. The historically low innovation and dynamic entrepreneurship rates have been identified as two of the main reasons for this situation. In this paper, we present a synthetic but comprehensive review of the empirical literature related to these topics in the region, as well as the results of the main impact evaluations performed to assess innovation and entrepreneurship policies implemented in Latin America. This review, together with the identification of unexplored or underexplored areas of research, is functional to introducing the investigations that are part of this special issue. ResumenEl desempeño económico de largo plazo de América Latina ha sido insatisfactorio, especialmente en comparación con otras economías emergentes que han podido lograr alcanzar los niveles de ingreso de los países desarrollados. Las tasas históricamente bajas de innovación y emprendimiento dinámico se han identificado como una de las principales causas de esta situación. En este

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