The Impact of Trade Promotion Services on Canadian Exporter Performance

Abstract

We evaluate the impact of the programs delivered by the Canadian Trade Commissioner Service (TCS) on export performance by Canadian firms. We draw on a unique set of microdata created by linking three separate firm-level databases: Statistics Canada’s Exporter Register and its Business Register, which provide information on export activity and firm characteristics, and the TCS client management database maintained by Foreign Affairs and International Trade Canada, which contains details on trade promotion services provided to Canadian firms. We apply the treatment effects analytical framework to isolate the effects of public sector trade promotion. We find that TCS programs have a consistent and positive impact on Canadian exporter performance. Exporters that access TCS services export, on average, 17.9 percent more than comparable exporters that do not. Furthermore, we also find that TCS assistance benefits exporters in terms of product and market diversification.

Keywords: Export Promotion, Heterogeneous Firms, Canada

JEL Classification: F13, F14, L15