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

Miguel Atienza (), Marcelo Lufin and Mauricio Sarrias
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Miguel Atienza: IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile

No 40, Documentos de Trabajo en Economia y Ciencia Regional from Universidad Catolica del Norte, Chile, Department of Economics

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.

Keywords: SME; regional development; supply chain; large scale mining; Chile. (search for similar items in EconPapers)
JEL-codes: D22 L25 L72 R11 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2013-03, Revised 2013-03
New Economics Papers: this item is included in nep-cse, nep-ent, nep-hme and nep-sbm
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