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Do SMEs' linkages with Large Mining Firms improve their performance? Evaluating heterogeneity among firms

Author

Listed:
  • Miguel Atienza

    (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile)

  • Marcelo Lufin Varas

    (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile)

  • Mauricio Sarrias

    (IDEAR - Master in Regional Science, Universidad Católica del Norte - Chile)

Abstract

In 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.

Suggested Citation

  • Miguel Atienza & Marcelo Lufin Varas & Mauricio Sarrias, 2013. "Do SMEs' linkages with Large Mining Firms improve their performance? Evaluating heterogeneity among firms," Documentos de Trabajo en Economia y Ciencia Regional 40, Universidad Catolica del Norte, Chile, Department of Economics, revised Mar 2013.
  • Handle: RePEc:cat:dtecon:dt201309
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    More about this item

    Keywords

    SME; regional development; supply chain; large scale mining; Chile.;
    All these keywords.

    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

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