Export Subsidies in a Heterogeneous Firms Framework: Evidence from Colombia

Christian Helmers () and Natalia Trofimenko

No 2010-26, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: We evaluate the impact of firm-specific export subsidies on exports in Colombia. Using a two-stage selection correction procedure, we obtain firm-specific predicted subsidy amounts that can be explained by the characteristics that determine the firms’ eligibility for government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries, we regard the discrepancy between the predicted and the observed subsidy amounts as a proxy for a firm’s ties to government officials. Controlling for observable and unobservable firm characteristics and persistence in exports, we find that although, in general, subsidies exhibit a positive impact on export volumes, this impact is diminishing in subsidy size and in the degree of a firm’s connectedness.

Keywords: Export promotion; export subsidies (search for similar items in EconPapers)
JEL-codes: F10 F13 H20 L20 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-dev and nep-int
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:csa:wpaper:2010-26

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