Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24837
Authors: 
Girma, Sourafel
Gong, Yundan
Görg, Holger
Yu, Zhihong
Year of Publication: 
2008
Series/Report no.: 
Kiel Working Paper 1442
Abstract: 
It is widely accepted that China has been experiencing an export-led growth approach. However, the question whether government can reshape industry structure through production subsidies to enhance export performance has not been answered. This paper analyses the impact of production subsidies on 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, 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 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.
Subjects: 
Exporting
subsidies
China
endogenous Tobit
JEL: 
F1
O2
P3
Document Type: 
Working Paper

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