An Inward Look Using Backward Economic Linkages in a Developing Country: The Case of Puntarenas, Costa Rica
Abstract
Purpose– The purpose of this study is to explore potential reasons that might explain why locally owned tourism firms cheat the use of backward economic linkages that (when used) might otherwise maximize the economic benefits of the tourism industry for locals.
Design/methodology/approach– For this exploratory qualitative case study research design, 25 face-to-face interviews were conducted with various tourism business owners and managers in Puntarenas, Costa Rica.
Findings– The findings indicate that while the participants felt that tourism business' economies of scale could be improved if all locally owned businesses purchased within the tourism supply chain they themselves were purchasing outside of the supply chain. This behavior was characterized as a result of a non-cooperative market.
Research limitations/implications– The major implication from the study is a trend that emerged from the data that seems to detect a tragedy of the commons scenario that is rooted in game theory. This scenario provides insight into a problem where tourism business owners and managers indicate an understanding of the value of using local network linkages, but instead cheat the system. A limitation of the study is that case studies may only be generalized to theoretical propositions and not to similar contextual situations.
Originality/value– Mainstream tourism literature has provided quantitative assessments that determine the direct, indirect, induced, and multiplier effects of local links between industries, sectors, and different producers that are used in the tourism supply chain. Findings from these studies indicate that local areas economically benefit when these links are actively used. However, not extensively addressed is identification of why (when most individuals know they may all benefit from the use of said linkages) cheat the system.