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Jose Vasquez and Isabela Manelici (Dartmouth Visiting PhD Students) will present:

"The Causal Effects of Joining Multinational Supply Chains: Evidence from Firm-to-Firm Linkages"

at 12:15pm on Tuesday, September 18, 2018 in (051 Buchanan) Volanakis - TUCK

Lunch will be served at noon.

If you will be attending the Lunch Seminar and have not already done so, please RSVP to Galen Muskat at TUCK so he can order the appropriate amount of food.

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ABSTRACT:

Can local firms boost their productivity by supplying to multinational firms (MNCs)? We use a combination of administrative datasets and survey data from Costa Rica to address this question in three steps. First, we make use of two complementary event study designs, where we define the event as the first time a local firm supplies to an MNC in the country and show that locals firms expand and adjust their production process after selling to their first MNC client. We address the concern of selection into supplying to MNCs based on time-varying unobservables by using a Government-led program that allows us to compare firms winning a deal with an MNC to their contenders to the same deal. Second, we propose an empirical test where a measure of adjusted sales to non MNC clients is informative on the existence and magnitude of productivity gains from supplying MNCs. From this, but also from classic approaches to measuring productivity, we show that new suppliers to MNCs experience sizable and long-lasting productivity gains. Third, we collect survey data to look into the black box of productivity gains. Survey answers suggest that suppliers learn from MNCs through their sharing of blue prints and recurrent audits.