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Do Export Promotion Agencies Increase Exports?
Author(s) -
Hayakawa Kazunobu,
Lee HyunHoon,
Park Donghyun
Publication year - 2014
Publication title -
the developing economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.305
H-Index - 30
eISSN - 1746-1049
pISSN - 0012-1533
DOI - 10.1111/deve.12048
Subject(s) - endogeneity , promotion (chess) , economics , international economics , export performance , control (management) , instrumental variable , international trade , business , econometrics , politics , political science , law , management
In this paper, we examine the role of export promotion agencies ( EPA s) in promoting exports from J apan and K orea. Looking at two home countries enables us to tackle endogeneity issues by controlling for both country‐pair time‐invariant characteristics and importing‐country time‐varying characteristics. Our empirical results indicate that EPA has a positive and significant effect on exports even when we control for endogeneity. However, the size of the effect becomes substantially smaller, implying the importance of addressing endogeneity in accurately measuring the impact of EPA on exports. In addition, we find that EPA 's (marginal) effects are larger in exporting to low‐income trade partners than in exporting to high‐income trade partners.