Sharpen your skills: the impact of training employees on backward linkages

Firms are increasingly participating in global value chains by becoming upstream suppliers of international companies located in their own countries. The available evidence indicates that becoming a successful supplier of these companies entail attaining capabilities that are typically above the average firm and thus countries are increasingly implementing training programs to help spur such backward linkages. Based on data from Chile and using propensity score matching estimators we measure the impact of training employees on the probability of being a supplier. The results indicate that there is a positive association between training employees and the probability of being a supplier, and that the training of production-related workers as well as professional and technicians have larger impacts than the training of administrative and clerical personnel.