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Can Production Subsidies Foster Export Activity? Evidence from Chinese Firm Level Data

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  • Girma, Sourafel
  • Gong, Yundan
  • Görg, Holger
  • Yu, Zhihong

Abstract

Using a unique firm level data set from the Chinese manufacturing sector, this paper analyses the impact of production subsidies on firms’ export performance. It documents robust evidence that production subsidies stimulate export activity, although this effect is conditional on firm characteristics. In particular, the beneficial impact of subsidies is found to be more pronounced amongst profit-making firms, firms in capital intensive industries and those with previous exporting experience. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives and privately-owned firms) proves to be relatively less important.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6052.

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Date of creation: Jan 2007
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Handle: RePEc:cpr:ceprdp:6052

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Keywords: China; endogenous tobit; exporting; subsidies;

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Cited by:
  1. Sourafel Girma & Holger Görg & Joachim Wagner, 2009. "Subsidies and Exports in Germany First Evidence from Enterprise Panel Data," Working Paper Series in Economics 117, University of Lüneburg, Institute of Economics.
  2. Naude, Wim & Rossouw, Stephanie, 2009. "Early International Entrepreneurship in China: Extent and Determinants," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Naude, Wim, 2009. ".Rushing in where Angels Fear to Tread?.: The Early Internationalization of Indigenous Chinese Firms," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Kolesnikova, Irina, 2010. "State Aid for Industrial Enterprises in Belarus: Remedy or Poison?," MPRA Paper 22403, University Library of Munich, Germany.
  5. Shabbir, Safia & Iqbal, Javed & Hameed, Saima, 2013. "Risk Premium, Interest Rate Differential, and Subsidized Lending in Pakistan," MPRA Paper 48250, University Library of Munich, Germany.
  6. Wim Naudé & Marianne Matthee, 2011. "The impact of transport costs on new venture internationalisation," Journal of International Entrepreneurship, Springer, vol. 9(1), pages 62-89, March.

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