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Export promotion agencies : what works and what doesn't

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Author Info
Lederman, Daniel
Olarreaga, Marcelo
Payton, Lucy

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Abstract

The number of national export promotion agencies (EPAs) has tripled over the past two decades. While more countries have made them part of their national export strategy, studies have criticized their efficiency in developing countries (Hogan, Keesing, and Singer 1991). Partly in reaction to these critiques, EPAs have been retooled (see International Trade Centre, 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 industrial and developing countries. Results suggest that on average they have a strong and statistically significant impact on exports. For each $1 of export promotion, the paper estimates a $40 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 The World Bank in its series Policy Research Working Paper Series with number 4044.

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Date of creation: 01 Nov 2006
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Handle: RePEc:wbk:wbrwps:4044

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Keywords: Economic Theory&Research; Country Strategy&Performance; Trade Policy; Tax Law; Free Trade;

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This paper has been announced in the following NEP Reports: 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.:
  1. Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self Discovery," CEPR Discussion Papers 3356, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Andrew K. Rose, 2005. "The Foreign Service and Foreign Trade: Embassies as Export Promotion," NBER Working Papers 11111, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Masaaki Kotabe & Michael R Czinkota, 1992. "State Government Promotion of Manufacturing Exports: A Gap Analysis," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 23(4), pages 637-658, December. [Downloadable!] (restricted)
  4. Puhani, Patrick A, 2000. " The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Blackwell Publishing, vol. 14(1), pages 53-68, February. [Downloadable!] (restricted)
  5. F H Rolf Seringhaus & Guenther Botschen, 1991. "Cross-National Comparison of Export Promotion Services: The Views of Canadian and Austrian Companies," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 22(1), pages 115-133, March. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. Djankov, Simeon & Freund, Caroline & Pham, Cong S., 2006. "Trading on time," Policy Research Working Paper Series 3909, The World Bank. [Downloadable!]
  8. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  9. 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 Journals, vol. 31(4), pages 725-734, December. [Downloadable!] (restricted)
  10. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Rubén Segura-Cayuela & Josep M. Vilarrubia, 2008. "The effect of foreign service on trade volumes and trade partners," Banco de España Working Papers 0808, Banco de España. [Downloadable!]
  2. Harding, Torfinn & Javorcik, Beata Smarzynska, 2007. "Developing economies and international investors : do investment promotion agencies bring them together ?," Policy Research Working Paper Series 4339, The World Bank. [Downloadable!]
    Other versions:
  3. González-Val, Rafael & Lanaspa, Luis & Pueyo, Fernando, 2009. "Trade policies, concentration, growth and welfare," MPRA Paper 9730, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  4. Rubén Segura-Cayuela & Josep M. Vilarrubia, 2008. "Uncertainty and entry into export markets," Banco de España Working Papers 0811, Banco de España. [Downloadable!]
  5. Andrew J. Cassey, 2008. "California's Exports and the 2004 Overseas Office Closures," Working Papers 2008-28, School of Economic Sciences, Washington State University. [Downloadable!]
  6. Mina Yakop & Peter A.G. van Bergeijk, 2009. "The weight of economic and commercial diplomacy," Working Papers - General Series 478, Institute of Social Studies. [Downloadable!]
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