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Innovation, Productivity, and Growth in Costa Rica

tn-920This technical note presents a detailed review of Costa Rica’s recent innovation policy. It discusses how far Costa Rica is from having innovation ecosystems (human networks that generate extraordinary creativity and output on a sustainable basis), and shows that the low innovative capacity of Costa Rican firms explains their low productivity, which in turn determines the moderate level of economic growth in the country. Among the main challenges that Costa Rica faces in moving toward an innovation-based economy, according to the evidence presented herein, is the low level of investment in research and development (R&D). Strengthening Costa Rican innovation ecosystems, creating closer linkages between SMEs and large companies including multinationals, in addition to increasing the domestic value-added of SME exports, and reduction (or even better, elimination) of the principal obstacles to the growth of companies, must be part of an innovation policy agenda. Costa Rica’s economic success will depend on how well it can design and implement policies and programs that lead toward achievement of an innovation-driven economy in the near future.

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Brochure Evaluación de Impacto PDPs



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Do Multinationals help or hinder Local Firms? Evidence from the Costa Rican ICT Sector

This study explores the impact of ICT and IT-enabled multinational corporations (MNCs) operating in Costa Rica on the performance of domestic ICT firms. We explore the extent to which interactions between domestic firms and MNCs contribute to the survival and growth of existing domestic ICT firms, as well as the creation of new domestic ICT firms, and the generation of new high-quality employment (higher wages) in those firms. We also analyze the latter topic from a gender perspective. We used panel data for firms and a novel matched establishment-worker database, both for the years 2001-2012, to estimate several econometric models. We complement this information with data collected through three cross-sectional surveys (of domestic ICT firms, of ICT and IT-enabled MNCs, and of employees from domestic ICT firms that previously worked in MNCs). The results show low levels of linkages between domestic companies and MNCs in the ICT sector, as well as few benefits produced by such relationships. We also encountered little competition between MNCs and domestic firms in the Costa Rican market of goods and services. There are several important differences when we do the analysis by ICT subsectors (software, solutions providers, and telecommunications). Results also indicate that labor mobility can be an important channel for MNC knowledge spillovers to domestic ICT firms. We found a wage premium due to both knowledge acquisitions by workers of domestic ICT firms that previously worked in ICT and IT-enabled MNCs, and to high competition in the Costa Rican labor market. It was found a gender bias in that premium. Wage inflation is a concern for the future competitiveness of this country. Important policy recommendations arise from the results of the complete analysis. Download Here

Productividad y Crecimiento de las Empresas en Costa Rica

estudio productividadEste documento presenta los hallazgos de un estudio sobre la productividad y el crecimiento de las empresas en Costa Rica, utilizando un panel para una muestra representativa de empresas registradas en la Caja Costarricense del Seguro Social entre los años 2001 y 2012. A nuestro saber, este estudio constituye el primero de su tipo en Costa Rica. Se utilizan varios modelos econométricos en el análisis. En primer lugar, se estudian los niveles de productividad por sector económico y según tamaño de empresa, a partir de la metodología propuesta por Olley y Pakes (1996). Además, se realiza un contraste entre la productividad de Costa Rica y la frontera, según sector productivo, tomando como referencia las productividades de los sectores productivos de los EE.UU. También se lleva a cabo un análisis de los determinantes del crecimiento de la productividad, a partir del enfoque de Griffith, Redding y Van Reenen (2004), tanto para la economía como un todo, como para cada uno de sus principales sectores productivos. Por último, se discute hasta qué punto las empresas más productivas son a su vez las que muestran el mayor crecimiento del empleo en Costa Rica, para lo cual utilizamos un modelo basado en Evans (1987). Descargar aquí

Índice General de Costos Empresariales

IDEAS y CAATEC, gracias al apoyo de Atlas Economic Research Foundation y la Fundación Naumann para la Libertad, elaboraron un Índice General de Costos Empresariales (IGCE) que refleja la evolución de los costos que enfrentan a lo largo de su proceso productivo las empresas que desarrollan actividades productivas en Costa Rica .

 La competitividad nacional depende directamente de la competitividad de las empresas que desarrollan actividades productivas en el país, y la competitividad de las empresas, a su vez, depende de los costos a los cuales se enfrentan localmente. Algunas publicaciones internacionales, como el Índice de Competitividad Global del World Economic Forum y los Reportes de Doing Business (Haciendo Negocios) del Banco Mundial nos permiten comparar la evolución, año a año, de variables relacionadas con la competitividad nacional y con los costos de hacer negocios para el caso de Costa Rica y varios otros países en el ámbito internacional. Sin embargo, los actores locales--incluyendo empresarios, potenciales inversionistas y encargados de políticas públicas--requieren complementar esa información valiosa con indicadores locales que permitan llevarle mejor el pulso, mes a mes, a la evolución de los costos para incorporarla en sus decisiones y definir sus prioridades de acción y de política.

Por tal motivo, ponemos a su disposición los resultados de Índice General de Costos Empresariales:

IGCE Marzo 2015

IGCE Febrero 2015

IGCE Enero 2015

IGCE Diciembre 2014

IGCE Noviembre 2014

IGCE Octubre 2014

IGCE Septiembre 2014

Presentación IGCE


Impact Evaluation of Innovation and Linkage Development Programs in Costa Rica: the Cases of PROPYME and CR Provee

pdps-propyme-crp  This paper estimates the impact of two productive development programs (PDPs) in Costa Rica: PROPYME and CR Provee. The first seeks to increase the capacity of small and medium-sized firms (SMEs) to innovate, and the second aims to increase backward linkages between Costa Rican SMEs and multinational companies operating in the country. The impacts of each program were measured in terms of three result variables: real average wages, employment demand, and the probability of exporting. A combination of fixed effects and propensity score matching techniques was used in estimations to correct for any selection bias. The results show that both PROPYME and CR Provee have positive and significant impacts on SME performance. PROPYME’s beneficiaries performed better than other firms in terms of labor demand and their probability of exporting, while firms treated by CR Provee showed higher average wages, labor demand, and chances of exporting than untreated firms. Firms treated simultaneously by both programs performed better in terms of average wages than those that were only treated by CR Provee. This result is of special interest to policy makers since it indicates the importance of bundling in the implementation of PDPs. The findings suggest that policies aimed at overcoming the weaknesses of these two programs are important to obtain higher real wages, generate more employment, and increase the probability of exporting by Costa Rican SMEs. Download here


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