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The role of subsidies for exports: Evidence from Portuguese manufacturing firms

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  • Armando Silva

    ()
    (nstituto Politécnico do Porto- ESEIG. Rua D. Sancho I, 981, 4480-876 Vila do Conde, Portugal.)

Abstract

Production subsidies have not been used by International Business literature to explain firms internationalization processes. We argue subsides may have a role to play in that process. Using a longitudinal database (1996-2003) at the plant level, this paper aims to shed light on the causal nexus between production-related subsidies and exports, in Portugal. We implement a propensity score matching approach in order to evaluate the effects of subsidies on both the probability of domestic firms to begin exporting and on the probability of increasing the export share of already exporters. We find no impact of subsidies on the ability of domestic firms to become exporters; additionally, no effects of subsidies are detected on export shares. Such disappointing results may be explained by the inefficiency in the granting criteria.

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File URL: http://www.gee.min-economia.pt/RePEc/WorkingPapers/gee_papers_35.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação in its series GEE Papers with number 0035.

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Length: 19 pages
Date of creation: Feb 2011
Date of revision: Feb 2011
Handle: RePEc:mde:wpaper:0035

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Keywords: Subsidies; Exports; Portugal; Matching;

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  1. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
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Cited by:
  1. Filipe SIlva & Carlos Carreira, 2011. "Financial constraints and exports: An analysis of Portuguese firms during the European monetary integration," GEMF Working Papers 2011-13, GEMF - Faculdade de Economia, Universidade de Coimbra.

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