Can Production Subsidies Explain China's Export Performance? Evidence from Firm-level Data
This paper analyses the relationship between production subsidies and firms' export performance using a very comprehensive and recent firm-level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity at the intensive margin, although this effect is conditional on firm characteristics. In particular, the positive relationship between subsidies and the intensive margin of exports is strongest among profit-making firms, firms in capital-intensive industries, and those located in non-coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives, and privately owned firms) proves to be relatively less important. Copyright The editors of the "Scandinavian Journal of Economics" 2009 .
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Volume (Year): 111 (2009)
Issue (Month): 4 (December)
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References listed on IDEAS
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- Sourafel Girma & Holger Görg & Aoife Hanley, 2008.
"R&D and Exporting: A Comparison of British and Irish Firms,"
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- Sourafel Girma & Holger Görg & Aoife Hanley, . "R&D and exporting: A comparison of British and Irish firms," Discussion Papers 07/18, University of Nottingham, GEP.
- Lee G. Branstetter & Robert C. Feenstra, 1999.
"Trade and Foreign Direct Investment in China: A Political Economy Approach,"
NBER Working Papers
7100, National Bureau of Economic Research, Inc.
- Branstetter, Lee G. & Feenstra, Robert C., 2002. "Trade and foreign direct investment in China: a political economy approach," Journal of International Economics, Elsevier, vol. 58(2), pages 335-358, December.
- Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
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