Do SMEs' linkages with Large Mining Firms improve their performance? Evaluating heterogeneity among firms
AbstractIn recent decades, several countries have proposed the promotion of mining clusters as a local development strategy. One of the expected results of this type of policy is the formation of a critical mass of local SMEs able to grow and export internationally. It is assumed that to achieve this result the vertical linkages between mining companies and SMEs favor the growth and competitiveness of local mining suppliers. This assumption, however, has not been verified. This paper analyzes whether the relationship between SME suppliers and large mining companies implies more growth in sales an labor. We study the case of the Antofagasta Region, one of the main miningareas in Latin America, where, since 2001, the government ha been promoting the formation of a mining cluster. We estimate an ordinal Probit model with random parameters, using panel data with a simple of more tan 500 SMEs from the Antofagasta Region, with information from the period 2003-2009. This methodology allows us to estimate whether first and second tier SME suppliers of the mining industry have, on average, better performance tan other SMEs and, also, which is the heterogeneity of results within each of these groups of SMEs.
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Bibliographic InfoPaper provided by Universidad Catolica del Norte, Chile, Department of Economics in its series Documentos de Trabajo en Economia y Ciencia Regional with number 40.
Length: 27 pages
Date of creation: Mar 2013
Date of revision: Mar 2013
SME; regional development; supply chain; large scale mining; Chile.;
Find related papers by JEL classification:
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-05 (All new papers)
- NEP-CSE-2013-05-05 (Economics of Strategic Management)
- NEP-ENT-2013-05-05 (Entrepreneurship)
- NEP-HME-2013-05-05 (Heterodox Microeconomics)
- NEP-SBM-2013-05-05 (Small Business Management)
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