Working Paper: CEPR ID: DP6052
Authors: Sourafel Girma; Yundan Gong; Holger Grg; Zhihong Yu
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
JEL Codes: F1; O2; P3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| production subsidies (H23) | export activity (F10) |
| profit-making firms (L21) | export activity (F10) |
| capital-intensive industries (L60) | export activity (F10) |
| previous exporting experience (F10) | export activity (F10) |
| production subsidies (H23) | export activity (for profit-making firms) (F10) |
| production subsidies (H23) | export activity (for capital-intensive industries) (O24) |
| production subsidies (H23) | export activity (for firms with previous exporting experience) (F10) |
| loss-making firms (D22) | export activity (F10) |
| ownership structure (G32) | export activity (F10) |