The Effect of Export Promotion on Firm-Level Performance

Research output: Contribution to journalJournal articlepeer-review

Most countries promote exports. This paper answers two questions: Does export promotion improve firm performance, and do any benefits outweigh costs? We solve self-selection problems by accounting for an extensive set of firm characteristics. In addition, we distinguish firms that self-selected into promotion services from firms the Danish Trade Council approached based on observed information. We find that export promotion increases sales, value added, employment, and value added per worker. For small firms, summing expenditures on export promotion, subsidies, and tax distortions, the gain in value added is roughly three times higher than the direct costs of export promotion.
Original languageEnglish
JournalAmerican Economic Journal: Economic Policy
Issue number1
Pages (from-to)357-387
Publication statusPublished - Feb 2018

    Research areas

  • Faculty of Social Sciences - D22 Firm Behavior: Empirical Analysis, F13 Trade Policy; International Trade Organizations, F14 Empirical Studies of Trade, L25 Firm Performance: Size, Diversification, and Scope, L53 Enterprise Policy

ID: 210440370