Export Promotion: what works?

A recent literature has argued that resources spent on export promotion help export growth (Van Biesebroeck, Konings and Volpe, 2016). In this paper we build on this work and examine the heterogeneity in returns across countries to disentangle which are the characteristics of Trade Promotion Organizations (TPOs) that are more likely to generate higher returns. Results suggest that on average a one percent increase in export promotion budgets increases exports by 0.074 percent, con rming results in the earlier literature. Our results also suggest that these export gains translate into very large GDP per capita gains. Indeed, a one percent increase in export budgets generates a 0.065 percent increase in GDP per capita. More interestingly, our results show which TPO characteristics generate large increases in exports, and which generate large gains in terms of GDP per capita.