Grant Support and Exporting Activity
Kiel Institute for the World Economy; Institute for the Study of Labor (IZA)
Michael E. Henry
Virginia Commonwealth University
Ecole Polytechnique, Paris - Department of Economic Sciences; Institute for the Study of Labor (IZA)
This paper investigates whether government support can act to increase exporting activity. We use a uniquely rich data set on Irish manufacturing plants and employ an empirical strategy that combines a non-parametric matching procedure with a difference-in-differences estimator in order to deal with the potential selection problem inherent in the analysis. Our results suggest that if grants are large enough they can encourage already exporting firms to compete more effectively on the international market. However, there is little evidence that grants encourage non-exporters to start exporting.
Number of Pages in PDF File: 22
Keywords: exporting, subsidies, matching, difference-in-differences
JEL Classification: L2, H2, F2, O3working papers series
Date posted: December 8, 2006
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