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Alternative Dimensions of Aid for Trade in Central America

technological content. For this reason, it is not uncommon to observe the collapse of this type of industries or well, important fluctuations in their sales. Regarding the reduction in the cost of discoveries, the interests of private companies and entrepreneurs are consistent with those of the society in general. This would foster the process of exploration and discovery of new export products and the well-known social benefit this implies. It is obvious that trade opening induces Governments to enhance the business climate. The case of Intel is a clear illustration of this issue. In a very short time, Costa Rica faced the need to change legislation and invest in infrastructure to enable the establishment of more foreign investment in the country, with the direct consequence of a best business climate for everyone. Those improvements became a legacy for the business setting up operations in the future, which in turn, feedback the process resulting in a virtuous circle. Consistent with the foregoing, the best FDI is the one that generates linkages, transfers technologies and creates dynamic positive feedback in developing countries. In this sense, Intel’s presence in Costa Rica is an example of the role the private sector can play to attract new investment and to generate linkages and “spill overs� to the rest of the economy. The companies that engage in the supply of intermediate products base their investment decisions in the size of the domestic market. The presence of companies of the magnitude of Intel creates the scale of demand necessary to attract that sort of investment.


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