The Effect of Export Promotion on Firm-Level Performance
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The Effect of Export Promotion on Firm-Level Performance. / Munch, Jakob; Schaur, Georg.
In: American Economic Journal: Economic Policy, Vol. 10, No. 1, 02.2018, p. 357-387.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - The Effect of Export Promotion on Firm-Level Performance
AU - Munch, Jakob
AU - Schaur, Georg
PY - 2018/2
Y1 - 2018/2
N2 - Most countries promote exports. This paper answers two questions: Does export promotion improve firm performance, and do any benefits outweigh costs? We solve self-selection problems by accounting for an extensive set of firm characteristics. In addition, we distinguish firms that self-selected into promotion services from firms the Danish Trade Council approached based on observed information. We find that export promotion increases sales, value added, employment, and value added per worker. For small firms, summing expenditures on export promotion, subsidies, and tax distortions, the gain in value added is roughly three times higher than the direct costs of export promotion.
AB - Most countries promote exports. This paper answers two questions: Does export promotion improve firm performance, and do any benefits outweigh costs? We solve self-selection problems by accounting for an extensive set of firm characteristics. In addition, we distinguish firms that self-selected into promotion services from firms the Danish Trade Council approached based on observed information. We find that export promotion increases sales, value added, employment, and value added per worker. For small firms, summing expenditures on export promotion, subsidies, and tax distortions, the gain in value added is roughly three times higher than the direct costs of export promotion.
KW - Faculty of Social Sciences
KW - D22 Firm Behavior: Empirical Analysis
KW - F13 Trade Policy; International Trade Organizations
KW - F14 Empirical Studies of Trade
KW - L25 Firm Performance: Size, Diversification, and Scope
KW - L53 Enterprise Policy
U2 - 10.1257/pol.20150410
DO - 10.1257/pol.20150410
M3 - Journal article
VL - 10
SP - 357
EP - 387
JO - American Economic Journal: Economic Policy
JF - American Economic Journal: Economic Policy
SN - 1945-7731
IS - 1
ER -
ID: 210440370