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

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  • Armando Silva

    () (Instituto Politécnico do Porto - ESEIG)

Abstract

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. Given that there is a selection of firms for subsidies we implement a propensity score matching approach in order to evaluate adequately 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. At one hand, we find no impact of subsidies on the ability of domestic firms to become exporters; at the other hand, some evidence of positive effects of subsidies are detected on export shares, especially for higher levels of subsidy per employee and for specific sectors as a clear sectoral heterogeneity is observed. Complementarily, some weak positive effects of subsidies are noticed in employment but no evidence is observed for firms´ sales or efficiency.

Suggested Citation

  • Armando Silva, 2010. "The role of subsidies for exports: Evidence for Portuguese manufacturing firms," FEP Working Papers 383, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:383
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    File URL: http://www.fep.up.pt/investigacao/workingpapers/10.07.26_wp383.pdf
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    References listed on IDEAS

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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," Notas Económicas, Faculty of Economics, University of Coimbra, issue 34, pages 35-56, December.

    More about this item

    Keywords

    Subsidies; Exports; Portugal; Matching;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other

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