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Export Promotion Agencies: What Works and What Doesn't

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  • Lederman, Daniel
  • Olarreaga, Marcelo
  • Payton, Lucy

Abstract

The number of national export promotion agencies (EPAs) has tripled over the last two decades. While more countries made them part of their national export strategy, studies criticized their efficiency in developing countries (Hogan, Keesing and Singer, 1991). Partly in reaction to these critiques, EPAs have been retooled (see ITC, 1998 or 2000 for example). This paper studies the impact of existing EPAs and their strategies, based on a new data set covering 104 developing and developed countries. Results suggest that on average they have a strong and statistically significant impact on exports. For each $1 of export promotion, we estimate a $300 increase in exports for the median EPA. However, there is heterogeneity across regions, levels of development and types of instruments. Furthermore, there are strong diminishing returns, suggesting that as far as EPAs are concerned small is beautiful.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5810.

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Date of creation: Aug 2006
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Handle: RePEc:cpr:ceprdp:5810

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Keywords: developing countries; export promotion agencies;

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  1. Alvarez, Roberto, 2004. "Sources of export success in small- and medium-sized enterprises: the impact of public programs," International Business Review, Elsevier, vol. 13(3), pages 383-400, June.
  2. Timothy J Wilkinson & Lance Eliot Brouthers, 2000. "Trade Shows, Trade Missions and State Governments: Increasing FDI and High-Tech Exports," Journal of International Business Studies, Palgrave Macmillan, vol. 31(4), pages 725-734, December.
  3. Masaaki Kotabe & Michael R Czinkota, 1992. "State Government Promotion of Manufacturing Exports: A Gap Analysis," Journal of International Business Studies, Palgrave Macmillan, vol. 23(4), pages 637-658, December.
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  5. Keesing, Donald B, 1983. "Linking Up to Distant Markets: South to North Exports of Manufactured Consumer Goods," American Economic Review, American Economic Association, vol. 73(2), pages 338-42, May.
  6. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
  7. Rose, Andrew K, 2005. "The Foreign Service and Foreign Trade: Embassies as Export Promotion," CEPR Discussion Papers 4953, C.E.P.R. Discussion Papers.
  8. Mihir A. Desai & James R. Hines Jr., 2001. "Exchange Rates and Tax-Based Export Promotion," NBER Working Papers 8121, National Bureau of Economic Research, Inc.
  9. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  10. Puhani, Patrick A, 2000. " The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
  11. Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
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