The impact on wages, employment and exports of backward linkages between multinational companies and SMEs

Leiva, Juan Carlos
Monge Rodríguez, Ricardo
Rodríguez-Alvarez, Juan Antonio

2017-12

LC/PUB.2017/24-P
5

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Policymakers often look for ways to attract foreign direct investment (FDI) by multinational corporations (MNCs). This paper estimates the impact of a programme, Costa Rica Provee, that seeks to increase backward linkages between small and medium-sized enterprises (SMEs) and MNCs in Costa Rica. The impacts were measured by reference to real average wages, employment demand and the probability of exporting, using a combination of fixed effects and propensity score matching with panel data on treated and untreated firms for 2001-2011. Programme beneficiaries evinced higher average wages, labour demand and export probabilities than untreated firms, with dose and duration also having a major influence.

WAGES; EXPORTS; CASE STUDIES; MEDIUM ENTERPRISES; SMALL ENTERPRISES; FOREIGN DIRECT INVESTMENT; TRANSNATIONAL CORPORATIONS; ESTUDIOS DE CASOS; EXPORTACIONES; SALARIOS; EMPRESAS MEDIANAS; PEQUEÑAS EMPRESAS; INVERSION EXTRANJERA DIRECTA; EMPRESAS TRANSNACIONALES;