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Subsidies and Exports in Germany: First Evidence from Enterprise Panel Data

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Author Info

  • Girma, Sourafel

    ()
    (University of Nottingham)

  • Görg, Holger

    ()
    (Kiel Institute for the World Economy)

  • Wagner, Joachim

    ()
    (Leuphana University Lüneburg)

Abstract

We use newly available representative panel data for manufacturing enterprises in West and East Germany to investigate the link between production-related subsidies and exports. We document that only a small fraction of enterprises is subsidized, and that exports and subsidies are positively related. Using a matching approach to investigate the causal effect of subsidies on export activities we find no impact of subsidies on the probability to start exporting, and only weak evidence for an impact of subsidies on the share of exports in total sales in West Germany but no evidence in East Germany.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4076.

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Length: 28 pages
Date of creation: Mar 2009
Date of revision:
Publication status: published in: Applied Economics Quarterly, 2009, 55 (3), 179-195
Handle: RePEc:iza:izadps:dp4076

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Keywords: export; Germany; enterprise panel data; subsidies;

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References

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  1. Christian Helmers & Natalia Trofimenko, 2009. "Export Subsidies in a Heterogeneous Firms Framework," Kiel Working Papers 1476, Kiel Institute for the World Economy.
  2. Görg, Holger & Henry, Michael & Strobl, Eric, 2007. "Grant Support and Exporting Activity," CEPR Discussion Papers 6054, C.E.P.R. Discussion Papers.
  3. Alberto Abadie & Guido W. Imbens, 2006. "On the Failure of the Bootstrap for Matching Estimators," NBER Technical Working Papers 0325, National Bureau of Economic Research, Inc.
  4. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 12 Feb 2014.
  5. Volpe Martincus, Christian & Carballo, Jerónimo, 2008. "Is export promotion effective in developing countries? Firm-level evidence on the intensive and the extensive margins of exports," Journal of International Economics, Elsevier, vol. 76(1), pages 89-106, September.
  6. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-32, Nov.-Dec..
  7. Andrew B. Bernard & J. Bradford Jensen, 2004. "Why Some Firms Export," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 561-569, May.
  8. Girma, Sourafel & Gong, Yundan & Görg, Holger & Yu, Zhihong, 2007. "Can Production Subsidies Foster Export Activity? Evidence from Chinese Firm Level Data," CEPR Discussion Papers 6052, C.E.P.R. Discussion Papers.
  9. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
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Cited by:
  1. Sebastian Petrick & Katrin Rehdanz & Ulrich J. Wagner, 2011. "Energy Use Patterns in German Industry: Evidence from Plant-level Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(3), pages 379-414, June.
  2. Afonso, Oscar & Silva, Armando, 2012. "Non-scale endogenous growth effects of subsidies for exporters," Economic Modelling, Elsevier, vol. 29(4), pages 1248-1257.
  3. Marcio Cruz, 2014. "Do Export Promotion Agencies Promote New Exporters?," IDB Publications 85293, Inter-American Development Bank.

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