Multinationals, Monopsony, and Local Development: Evidence From the United Fruit Company

• 成果类型: Article
• 署名作者: Mendez, Esteban; Van Patten, Diana
• 署名单位: Yale University; National Bureau of Economic Research
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA19514
• 发表日期: 2022
• 页码: 2685-2721
• 关键词: FOREIGN-INVESTMENT; domestic firms; PRODUCTIVITY; TECHNOLOGY

摘要

This paper studies the role of private sector companies in the development of local amenities. We use evidence from one of the largest multinationals of the 20th century: the United Fruit Company (UFCo). The firm was given a large land concession in Costa Rica-one of the so-called Banana Republics-from 1899 to 1984. Using administrative census data with census-block geo-references from 1973 to 2011, we implement a geographic regression discontinuity design that exploits a land assignment that is orthogonal to our outcomes of interest. We find that the firm had a positive and persistent effect on living standards. Company documents explain that a key concern at the time was to attract and maintain a sizable workforce, which induced the firm to invest heavily in local amenities-like the development of education and health infrastructure-that can account for our result. Consistent with this mechanism, we show, empirically and through a proposed model, that the firm's investment efforts increase with worker mobility.