Can Production Subsidies Foster Export Activity? Evidence from Chinese Firm Level Data

36 Pages Posted: 8 Dec 2006

See all articles by Sourafel Girma

Sourafel Girma

Nottingham University Business School

Yundan Gong

Nottingham University Business School

Holger Görg

University of Kiel; Kiel Institute for the World Economy

Zhihong Yu

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)

Multiple version iconThere are 2 versions of this paper

Date Written: 2006

Abstract

Using a unique firm level data set from the Chinese manufacturing sector, this paper analyses the impact of production subsidies on firms' export performance. It documents robust evidence that production subsidies stimulate export activity, although this effect is conditional on firm characteristics. In particular, the beneficial impact of subsidies is found to be more pronounced amongst profit-making firms, firms in capital intensive industries and those with previous exporting experience. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives and privately-owned firms) proves to be relatively less important.

Keywords: Exporting, subsidies, China, endogenous tobit

JEL Classification: F1, O2, P3

Suggested Citation

Girma, Sourafel and Gong, Yundan and Gorg, Holger and Yu, Zhihong, Can Production Subsidies Foster Export Activity? Evidence from Chinese Firm Level Data (2006). Available at SSRN: https://ssrn.com/abstract=950257 or http://dx.doi.org/10.2139/ssrn.950257

Sourafel Girma (Contact Author)

Nottingham University Business School ( email )

Jubilee Campus
Nottingham, NG8 1BB
United Kingdom
+44 0 115 8466656 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/~lizsmg/

Yundan Gong

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham NG8 1BB
United Kingdom

Holger Gorg

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany

Zhihong Yu

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

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