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



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.

Comisión Económica para América Latina y el Caribe (CEPAL) - Biblioteca Hernán Santa Cruz

Mirian Ramirez

Biblioteca CEPAL, Edificio Naciones Unidas, Av. Dag Hammarskjold 3477, Santiago, Chile

(+56-2) 2210-2337

Desarrollado por: Aikyu-Systems