Advanced Search
MyIDEAS: Login to save this paper or follow this series

Non-scale endogenous growth effects of subsidies for exporters

Contents:

Author Info

  • Óscar Afonso

    ()
    (CEFUP, NIFIP, OBEGEF, Faculdade de Economia, Universidade do Porto)

  • Armando Silva

    ()
    (Instituto Politécnico do Porto-ESEIG)

Abstract

We built a general equilibrium endogenous growth model in which final goods are produced either in the relatively skilled-labour intensive exports sector or in the relatively unskilled-labour intensive domestic sector. We show that, by affecting the technological-knowledge bias, subsidies explain the simultaneous rise in the exports sector, the skill wage premium and the economic growth rate. Then, we use a Portuguese longitudinal database (1996-2003) and implement a propensity score matching approach to shed light upon the causal nexus between production-related subsidies and exports. Our empirical results seem to prove the theoretical predictions: subsides generate the rise in the wage premium of exporters and the increase in the relative size of export sector, even if no impact of subsidies is found in the capacity of enhancing new exporters.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.fep.up.pt/investigacao/workingpapers/11.09.19_wp429.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 429.

as in new window
Length: 30 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:por:fepwps:429

Contact details of provider:
Postal: Rua Dr. Roberto Frias, 4200 PORTO
Phone: 351-22-5571100
Fax: 351-22-5505050
Email:
Web page: http://www.fep.up.pt/
More information through EDIRC

Related research

Keywords: Subsidies; Exports; Scale-invariant growth; Wages;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Guido Cozzi & Giammario Impullitti, 2008. "Government spending composition, technical change and wage inequality," Working Papers 2009_02, Business School - Economics, University of Glasgow.
  2. Dani Rodrik, 2006. "What’s So Special about China’s Exports?," Working Papers id:410, eSocialSciences.
  3. 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.
  4. Panagariya, Arvind, 2000. "Evaluating the case for export subsidies," Policy Research Working Paper Series 2276, The World Bank.
  5. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  6. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  7. Kang-Shik Choi & Jinook Jeong, 2005. "Technological change and wage premium in a small open economy: the case of Korea," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 119-131.
  8. Gadd, Håkan & Hansson, Gustav & Månsson, Jonas, 2008. "Evaluating the impact of firm subsidy using a multilevel propensity score approach," CAFO Working Papers 2009:3, Centre for Labour Market Policy Research (CAFO), School of Business and Economics, Linnaeus University.
  9. Joachim Wagner, 2005. "Exports and Productivity: A survey of the evidence from firm level data," Working Paper Series in Economics 4, University of Lüneburg, Institute of Economics.
  10. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(2), pages 235-267, June.
  11. Christian Helmers & Natalia Trofimenko, 2009. "Export Subsidies in a Heterogeneous Firms Framework," Kiel Working Papers 1476, Kiel Institute for the World Economy.
  12. 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..
  13. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
  14. Görg, Holger & Henry, Michael & Strobl, Eric, 2008. "Grant support and exporting activity," Open Access Publications from Kiel Institute for the World Economy 4288, Kiel Institute for the World Economy (IfW).
  15. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
  16. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  17. 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.
  18. D. Mitra, 2000. "On the Endogenous Choice between Protection and Promotion," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 33-51, 03.
  19. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
  20. Sourafel Girma & Yundan Gong & Holger Gˆrg & Zhihong Yu, 2009. "Can Production Subsidies Explain China's Export Performance? Evidence from Firm-level Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 863-891, December.
  21. Michael Bleaney & Norman Gemmell & Richard Kneller, 2001. "Testing the endogenous growth model: public expenditure, taxation, and growth over the long run," Canadian Journal of Economics, Canadian Economics Association, vol. 34(1), pages 36-57, February.
  22. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  23. Oscar Afonso, 2006. "Skill-biased technological knowledge without scale effects," Applied Economics, Taylor & Francis Journals, vol. 38(1), pages 13-21.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:por:fepwps:429. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.