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The Use and abuse of export subsidies: evidence from Colombia

Helmers, Christian and Trofimenko, Natalia (2013) The Use and abuse of export subsidies: evidence from Colombia. World Economy, 36 (4). pp. 465-486. ISSN 0378-5920

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Identification Number: 10.1111/twec.12033


We evaluate the impact of firm-specific export subsidies on exports in Colombia. Using a two-step selection model, we predict firm-specific subsidy amounts that can be explained by the characteristics that determine firms’ eligibility for government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries, we interpret the discrepancy between the predicted and the observed subsidy amounts as a proxy for a firm's ties to government officials. Controlling for observable and unobservable firm characteristics as well as persistence in exporting, we find that although, in general, subsidies exhibit a positive impact on export volumes, this impact is diminishing in subsidy size and in the degree of a firm's connectedness.

Item Type: Article
Official URL:
Additional Information: © 2013 Blackwell Publishing Ltd
Divisions: LSE
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
Date Deposited: 01 Jul 2014 14:46
Last Modified: 20 Apr 2021 02:27
Projects: ES/J021342/1
Funders: Economic and Social Research Council

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