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

Sourafel Girma (), Yundan Gong (), Holger Görg () and Zhihong Yu

No 6052, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: China; endogenous tobit; exporting; subsidies (search for similar items in EconPapers)
JEL-codes: F1 O2 P3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-dev, nep-int, nep-sea and nep-tra
Date: 2007-01
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