Can production subsidies explain China's export performance? Evidence from firm-level data

Sourafel Girma, Yundan Gong, Holger Görg, Zhihong Yu

Research output: Contribution to journalArticle

Abstract

This paper analyses the relationship between production subsidies and firms’ export performance using a very comprehensive and recent firm-level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity at the intensive margin, although this effect is conditional on firm characteristics. In particular, the positive relationship between subsidies and the intensive margin of exports is strongest among profit-making firms, firms in capital-intensive industries, and those located in non-coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives, and privately owned firms) proves to be relatively less important.
Original languageEnglish
Pages (from-to)863-891
Number of pages29
JournalScandinavian Journal of Economics
Volume111
Issue number4
DOIs
Publication statusPublished - Dec 2009

Keywords

  • exporting
  • subsidies
  • China
  • endogenous Tobit

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