Export boosting policies and firm performance: Review of empirical evidence around the world

Srhoj, Stjepan; Vitezić, Vanja; Wagner, Joachim Article Export boosting policies and firm performance: Review of empirical evidence around the world Journal of Economics and Statistics Provided in Cooperation with: De Gruyter Brill Suggested Citation: Srhoj, Stjepan; Vitezić, Vanja; Wagner, Joachim (2023) : Export boosting policies and firm performance: Review of empirical evidence around the world, Journal of Economics and Statistics, ISSN 2366-049X, De Gruyter Oldenbourg, Berlin, Vol. 243, Iss. 1, pp. 45-92, https://doi.org/10.1515/jbnst-2022-0019 This Version is available at: https://hdl.handle.net/10419/333245 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Literature Review Stjepan Srhoj, Vanja Vitezić* and Joachim Wagner Export Boosting Policies and Firm Performance: Review of Empirical Evidence Around the World https://doi.org/10.1515/jbnst-2022-0019 Received March 30, 2022; accepted December 15, 2022 Abstract: How effective are government policy attempts to boost firm exports in the short-run? We answer this question by conducting a review of 33 studies from 26 countries around the world, and provide nine findings. Export boosting policies are defined as a group of public policies that aim to increase firm exports in the shortrun. These include policies such as export promotion, export-oriented public grants, public export guarantee schemes and subsidised export loans. Our review provides insights into policy effectiveness with respect to extensive and intensive export margins, as well as firms’production function inputs and its outputs. The heterogeneity of effects across firm characteristics is emphasised, and the discussion is enriched with new evidence of spillover effects from export boosting policies. Finally, we summarise back-of-the-envelope calculations of the cost-benefit analysis and provide recommendations for future research. Keywords: export promotion policies, guarantees, grants, loans, impact evaluation, review JEL Classification: F13, F14, L15, L25, 010, 024 1 Introduction For a country to converge to the technological frontier, it makes a choice between technological catch-up and frontier innovation policy (Aghion et al. 2021). However, *Corresponding author: Vanja Vitezić, Faculty of Tourism and Hospitality Management, P.O.B. 97, Primorska 46, 51410 Opatija, Rijeka, Croatia, E-mail: [email protected] Stjepan Srhoj, Department of Economics, Faculty of Economics, Business and Tourism, Universityof Split, Split, Croatia, E-mail: [email protected] Joachim Wagner, Leuphana University Lueneburg, Lueneburg, Germany, E-mail: [email protected]. https://orcid.org/0000-0001-6058-4536 Journal of Economics and Statistics 2023; 243(1): 45–92 Open Access. © 2023 the author(s), published by De Gruyter. This work is licensed under the Creative Commons Attribution 4.0 International License. both technological catching-up and innovation-based economies seek to increase their gross domestic product by boosting exports of high-value added innovative or imitative products. For a long time, it was unclear whether exports through learningby-exporting lead to increased firm performance. Many scholars have found positive associations between exports and a premium in firm performance, being more productive, larger, and paying higher wages 1 but it is Atkin et al. (2017) who show experimental evidence in favour of learning-by-exporting where exporting improves technical efficiency. This is an important finding because learning-by-exporting implies not only a fluctuation along the production possibility frontier curve, but an outer change. An outer change in the production possibility frontier implies economic growth, and therefore makes export boosting 2 a tempting objective for policymakers (Cruz et al. 2018; Wagner 2007), particularly for small open economies where it is critical that a large number of firms find a path to the export market (Baldauf et al. 2000; Broocks and Van Biesebroeck 2017; Coad and Vezzani 2019). Our goal is to systematically review robust counterfactual evaluations of public policies aiming to directly boost firm exports in the short-run. 1.1 Export Promotion Agencies Given the interest in boosting exports, the number of national export promotion agencies (EPAs) and their export promotion programmes (EPPs) has grown significantly over the past 20 years (Cruz et al. 2018; Lederman et al. 2010; Olarreaga et al. 2020). In the 1990s, approximately 65% of existing EPAs in developing countries were created with the goal ofsupporting the transition from a heavy reliance on importsto exports (Cruz et al. 2018). Regardless of whether they are in developing or developed countries, many EPAs are public entities that receive a substantial amount of funding from the government, i.e. taxpayers (Van Biesebroeck et al. 2015), although there are already private firms providing similar replacement services (Cruz et al. 2018). It appears that public funding is necessary for existing EPAs and EPPs to function, so it comes as no surprise that some researchers have criticised the efficiency of agencies in developing countries (e.g. Lederman et al. 2010). The efficiency of public money spent on EPPs may be a particular concern when public budgets are tight and policymakers want to prioritise the most efficient interventions. 1For example: Wagner (2007), Costa et al. (2017), Debellis et al. (2021). 2With the emergence of international trade laws, regional regulations, and multilateral trade agreements, most governments have shifted from traditional macroeconomic policy interventions to other forms of export assistance (Aalto and Gustafsson 2020), therefore, the policy focus has shifted to the micro-level. In particular, the focus of trade policy has moved towards trade facilitation and export promotion (Cadot et al. 2015). 46 S. Srhoj et al. EPAs assist firms overcome circumstantial difficulties and become successful exporters (Munch and Schaur 2018). If there are private providers of export promotion services and public entities support exporters, the question is why governments intervene in the market with EPAs and what market failure they are trying to address. The main economic rationales for government support are to promote information spillovers and to address trade barriers such as information asymmetries (Aalto and Gustafsson 2020; Copeland 2008). Information asymmetries between the potential exporter and foreign customers and companies, as well as the lack of trust between actors in international business, can be eliminated if the potential exporter incurs the sunk costs of obtaining the needed information. Otherwise, alack of information can lead to underinvestment, so EPAs aim to share risk with potential exporters and reduce information asymmetry. In terms of information sharing, successful exporting of products can lead to information sharing with other exporting and non-exporting firms about demand conditions for different types of products in a foreign market. Copeland (2008) concludes that information spillovers form the theoretical backbone of government export promotion, but empirical evidence of spillover effects requires further research. Cadot et al. (2013) provide examples of positive spillover effects from exporters to neighbouring firms producing similar products. However, if there are no information spillover effects, Copeland (2008) questions the need for an export promotion scheme. EPPs can be directed at various promotional activities, such as building a country image through promotion and advocacy or various bundles of support services (Lederman et al. 2010: 257). Export support services may include training, technical regulations, quality standards, capacity building, logistics, customs packaging, pricing, as well as marketing services such as advertising, trade fairs, exhibitions, missions, and follow-up services offered by representatives abroad (Lederman et al. 2010; Munch and Schaur 2018; Volpe Martincus and Carballo 2010a). The range of support services is broad and includes partner search and matchmaking (meetings, recruitment, contact databases, and other forms of market entry assistance) (Munch and Schaur 2018) as well as market research and publications (datasets and information, surveys, publications) (Lederman et al. 2010). In addition, services may include the analysis of political and economic conditions, international law, and business plans (Munch and Schaur 2018; Volpe Martincus and Carballo 2010a). Several studies evaluate the effects of EPAs and direct subsidies on exporters. Bernard and Jensen (2004) use a panel of U.S. manufacturing firms to examine the factors that increase the probability of entry into exporting. Their study found volatile entry and exit rates of manufacturing firms into the export market, with past exporters having a higher probability of re-entering exporting, while current exporters have a higher probability of remaining exporters in subsequent years. Export Boosting Policies and Firm 47 Since entry costs are substantial and the spillover effects of other firms’export activity are negligible, Bernard and Jensen (2004) conclude that export promotion costs do not have a significant effect on firm-level export prospects. At the aggregate level, Rose (2007) used bilateral gravity model of trade to answer whether presence of the foreign missions is associated with country-level export growth. He finds that each additional consulate is associated with an increase in exports by six to ten percent. Finally, using survey data from 103 developing and developed countries, Lederman et al. (2010) find a statistically significant effect of EPAs and their strategies on country-level exports. 1.2 Export Boosting Policies While EPP are the most commonly used policy, they are notthe only policy to directly boost exports. Some authors (e.g. Broocks and Van Biesebroeck 2017) include financial subsidies under the umbrella of EPPs, but there are also other policies such assubsidisedexportloans(i.e.exportdiscountcredit programmes) and public export credit guarantees. For example, Defever et al. (2020a) provide evidence for subsidised export loans, Agarwal et al. (2018) for public export credit guarantees, while Defever and Riaño (2017) using a two-country model of trade with heterogeneous firms, provide a quantitative assessment of the effect that subsidies with an export share requirement have on exports and conclude that this type of subsidy increases exports more than an equivalent unconditional subsidy accessible to each exporter. All of these policies aim to boost exports and should therefore be reviewed together. Therefore, together with EPPs we defined these policies as export boosting policies (EBP): Export boosting policies are defined as a group of public policies that aim to increase firm exports in the short-run. These include export-oriented capacity building, attending trade fairs, exhibitions, missions, partner search matchmaking, pricing, advertising, analysis of the context abroad (i.e. export promotion policy), export credit guarantees, subsidized export loans, or exportoriented public grants. EBP could be particularly effective for the smaller firms (Atkin et al. 2017; Broocks and Van Biesebroeck 2017; Munch and Schaur 2018), primarily because they face higher information asymmetry. Credit export guarantees may be particularly relevant for guaranteeing larger shipments of smaller firms, while public grants and subsidized export loans could be particularly relevant for smaller firms with greater capital constraints (see McKenzie 2017; Srhoj et al. 2021). 48 S. Srhoj et al. 1.3 The Position of Export Boosting Policies in a Wider Set of Public Policies EBPs potentially contribute to firm exports, however EBPs are not the only public policies that contribute to exports. To understand this point, two dimensions are useful for placing EBPs within a broader set of public policies: the time horizon and the policy objective. Many public policies may have the indirect objective of increasing exports in the medium or long term 3 (see also Coad et al. 2022; Bloom et al. 2019), however, EBPs are short-term in nature, have the immediate goal of increasing exports of target firms in the short-run, and typically include the words “exports”or “foreign market”in their title and description. International trade theories (e.g. those of Vernon and Posner) emphasise the importance of “research and development” (R&D) processes for innovation and thus for firm exports. Altomonte et al. (2013) suggested that EBPs should be considered “under the same umbrella”as innovation policies, yet they are usually analysed separately. In particular, for small open economies, R&D grants and tax incentives can be considered EBPs, but they do fall outside our definition. 4 To explain why, we provide Figure 1, which depicts the flowchart of the R&D process in two stages and a Figure 1: Flowchart of the R&D process. Source: Aghion et al. (2021: 207). 3For example, in their reviews, Bloom et al. (2019) and Coad et al. (2022), suggest ways to increase innovation and indirectly exports in medium to long run by reforming intellectual property law, designing tax incentives for patents (i.e. patent box), improving education system, increasing the number of individuals trained in science, technology, engineering, and mathematics, increasing skilled immigration, improving labour market regulation, firm competition and trade openness, R&D policy, national mission-oriented R&D projects, public procurement policy (e.g. building a bridge or railroad), or reforming bankruptcy laws to speed up resource allocation to a higher value use (i.e. Srhoj et al. 2022). These are all worthy ways which can indirectly increase firm productivity and innovativeness and therefore contribute to boosting exports in a medium to long term. 4Although R&D grants fall outside our definition, we agree with Altomonte et al. (2013) –across the full policy cycle, EBPs could be “under the same umbrella”as innovation policies. It should also be noted that alhough EBPs should be primarily used for higher value goods and services, they are not restricted only to innovation and innovative firms. Export Boosting Policies and Firm 49 commercialization stage. Stage 0 includes basic research, which is usually considered “research”in “R&D”and is dominated by universities and research institutes (Aghion et al. 2021), while few private firms are actively involved in this stage. Stage 1 is applied research, which is also referred to as “development”in “R&D”, but is often referred to as R&D in the analysis of private firms, R&D investment, grants, and tax incentives (for review, see Dimos et al. 2022; Vanino et al. 2019; Zúñiga-Vicente et al. 2014). There is a time gap between conducting additional R&D activities, developing new patents, innovative products or services, and selling the new product in domestic or foreign markets (e.g. Vanino et al. 2019). EBPs focus on boosting exports in the short term during the commercialization stage, which can come after stages 0 and 1, but can also be independent of the R&D process and focused on completly standardized or imitative products. Other forms of state aid, such as public grants outside R&D that are not explicitly aimed at boosting exports are not considered in our analysis. The effects of public grants on SME performance in the EU has been reviewed by Dvouletý et al. (2021), while Kersten et al. (2017) provide an overview of other forms of SME financing in developing countries. We also do not focus on the impact of entrepreneurship support institutions, although these institutions may implement EBPs or provide information on EBPs to firms. For example, cluster policies allow for a finer division of labour and greater proximity between firms, lead to greater trust between firms, and facilitate trade credit between firms, but tend to affect firms’export performance in the medium to long term (Figal Garone et al. 2015; Long and Zhang 2011; Schmitz 1999). Hallen et al. (2020) discuss business incubators and accelerators that can implement EBPs or provide information on EBPs. However, because business incubators and accelerators provide many activities to a small number of both domestic and foreign market-focused firms, among the firm participants of business incubators and accelerators it is difficult to dissentangle the impact of EBP on firm performance. Various types of entrepreneurship promotion infrastructure, such as entrepreneurship zones, export processing zones, or business parks, provide quick access to business infrastructure under favourable conditions. These zones can attract foreign direct investment and have positive effects on the productivity and exports of participating and nearby firms. 5 However, since they do not always have to be export-oriented or require considerable time from the idea to the implementation of the policy measures and finally to the impact at the firm level, we do not deal with them in our study. In summary, our contribution is to review EBPs and firm performance. 5For example: Liu and Jin (2022), Wu et al. (2020), Johansson and Nilsson (1997), Kaplinsky (1993). 50 S. Srhoj et al. 1.4 Research Statement There is a vast array of empirical studies on the topic of EBPs with heterogeneous empirical rigour. Over the years, the sheer accumulation of such studies has led to some confusion among policymakers and practitioners about how to support and boost exports. The purpose of this paper is to systematically review robust empirical evidence on the effectiveness of EBPs. In our review, we included only studies with high methodological rigour, this way supporting the so-called credibility revolution in applied economics (Angrist and Pischke 2010). The importance of policy evaluation studies with high methodological rigour has been emphasized by many international organisations (e.g. World Bank, OECD, European Commission), many scientific studies (e.g. Khandker et al. 2010; Gertler et al. 2016; Storey 2017) and used as a search filter in systematic literature reviews of policy evaluation studies (e.g. Dvouletý et al. 2021). Since selection into an EBP is not random, various experimental and quasiexperimental approaches have been used, most of which falls on the matching techniques, two-step estimation methods (instrumental variables or Heckman), fuzzy regression discontinuity design (RDD), fixed effects methods and randomised control trials (RCT). We consider a range of EBPs and provide a structured review of 33 studies from 26 countries worldwide. Our study provides insights into the effectiveness of EBPs in terms of extensive and intensive export margins as well as firms’ production function and output. We show heterogeneity of effects with respect to different firm characteristics and discuss new evidence on spillover effects of export policies. We move from micro to macro effects and provide an overview of back-of-the-envelope calculations that shed light on macroeconomic effects. Finally, we discuss the future research agenda and provide recommendations for policymakers. 2 Methodology and Selection of Articles 2.1 Methodology and Code Systematic reviews are very convenient for surveying scientific research using quantitative methods (e.g. randomized controlled trials, quasi-experimental designs, etc.) (Tranfield et al. 2003). In order to provide a homogeneous analysis of a policy, this paper provides a systematic overview of microeconometric effects focusing specifically on EBPs and firm performance. To ensure a scientifically rigorous literature review we followed the guidelines of Xiao and Watson (2019) in defining Export Boosting Policies and Firm 51 thepurposeandintendedobjectivesofthe search, clarifying a detailed and consistent protocol, and developing and refining the screening process and quality assessment. The first step of the research process was to minimize human error and bias using a data extraction form (Tranfield et al. 2003). To systematically find and select articles, we developed a search code based on the original code by Dvouletý et al. (2021: 17). The Thomson Reuters Web of Science Core Collection database (Clarivate Analytics 2020) was selected because it provides the most valuable collection of high-impact articles (Dvouletý et al. 2021). The next step was to form a code review panel composed of five senior scholars respected in the field of international economics, international trade, and/or firm-level public policy evaluation. We received feedback from the review panel in January 2020. After the experts in methodology and theory approved the code, we applied the following search code in the Web of Science database from February 15–20, 2020, to find relevant articles: TS 6 = (export subsid OR export-promotion service OR export promotion OR export grant OR export credit guarantee OR export credit insurance facilit OR export rediscount credit OR subsid export loans OR trade missions) AND TS = (business OR firm OR enterprise OR compan) AND TS = (firm performance OR productivity OR profit OR employment OR sales OR revenue OR turnover OR value added OR export status OR export intensity OR import intensity OR capital OR raw material OR intermediate input OR wage bill OR destination countr OR number of product OR age OR location) AND TS = (experiment OR field experiment OR randomized evaluation OR random OR impact evaluation OR impact assessment OR counterfactual evaluation OR propensity score OR regression discontinuity OR diff-in-diffOR difference-in differences OR difference in differences OR OLS OR fixed-effect OR instrumental variable OR identification strategy OR impact on OR impact of OR causal Structurally, our code consists of four parts reflecting the policy instruments used to boost exports, the firm as the unit of observation, the outcome variables of interest and the methods used to evaluate counterfactual impacts. At the end of this step, our initial dataset from the Web of Science database encompassed 228 research articles. 6TS = Topic (Searches the topic fields in all databases in the subscription. Topic fields include titles, abstracts, keywords, and indexing fields such as systematics, taxonomic terms, and descriptors). 52 S. Srhoj et al. Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings organisation of trade missions both for domestic sellers and foreign buyers and coordination of interviews with potential customers. process of starting export businesses and building up buyer-seller relationships with foreign partners. Munch and Schaur () Denmark, export promotion services provided by Danish trade Council –, universe of Danish firms,  treated and control firms. Export promotion policy Export activities, sales, value added, employment, value added per worker DiD PSM Export promotion facilitates entry into export markets and the continuation of export activity across all types of firms. The effects are the largest for small firms. Export promotion increases sales, value added, employment, and value added per worker. For small firms, summing expenditures on export promotion, subsidies, and tax distortions, the gain in value added is roughly three times higher than the direct costs of export promotion. Karoubi et al. () France; enhancing the exports of SMEs –, SMEs Export promotion policy SMEs (– employees), a consequent set of measures, i.e. four EPPs Export intensity, the probability of turning to exports Matching (PSM) EPPs increases firm export intensity by .% and its probability of turning to exports by roughly %. The impact of public support holds for the sector of services but disappears for Export Boosting Policies and Firm 59 Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings (financial support, Competencies development, network, innovation) to remove export barriers by lowering the variable or fixed costs of international developments. industrial firms. The impact of EPPs is significant for profitable enterprises but not for loss-making enterprises. The impact of EPPs is significant for enterprises that are exposed to positive externalities, but not for other SMEs. The efficiency of EPPs depends on the nature of the support, i.e. only financial and innovation EPPs have a significant impact on the increase of intensity (by about % each). The only type of EPP that significantly increases the probability of switching to export is network EPP with a roughly % increase. Comi and Resmini () Italy (lombardia); three types of vouchers (A, B and C) – period,  treated firms,  control firms; about , firm/year observations EPP Export propensity and export intensity. Fixed-effect DiD estimator with exante matching A positive effect of EPPs on export propensity and export intensity has been found. The effects are larger for services classified as “promotional” (e.g. participation at international trade fairs and exhibitions) than for “technical assistance and counselling” activities or “information and knowledge specific provision”services (e.g. participation in economic mission Funds for activities: A-providing technical assistance and counselling. B-organising outgoing economic missions abroad. C–encouraging participation at 60 S. Srhoj et al. Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings abroad). The joint use of multiple servicesismoreeffectiveinpromoting exports than individual ones. The impact of trade fairs on export intensity is increased when accompanied by technical assistance and specialised counselling. Heterogenous effects show larger effects for firms with export experience, as well as for micro and small-sized firms. Other, non–promotional support activities are able to increase only the export propensity of non-exporting firms. international fairs and exhibitions held abroad. Volpe Martincus and Carballo () Peru; PROMPEX export promotion activities –, all exporting firms (in , firms with  assisted by PROMPEX) EPP Export performance of firms by intensive and extensive margins DiD, matching (nearest neighbor, radius, and kernel estimators), system GMM The research has shown export promotion activities associated with increased exports, primarily along the extensive margin, both in terms of markets and products. The results are robust across alternative specifications and estimation methods. Cansino, Lopez- Melendo et al. () Spain; promoting internationalisation of companies , treated and  control firms EPP diagnostic programmes (DP) promote the internationalisation of Activity, location, sales and number of employees Matching (PSM) Companies participating in the DP have a higher exports/sales ratio than companies that have not been involved in the DP (on average %). Export Boosting Policies and Firm 61 Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings SMEs in andalusia during their preliminary or initial stages of the internationalisation process. The results are significant for the four bandwidths used. On average, the DP seems to have significant positive effects on exports for small-and medium-sized companies which have never exported or that have a minimal experience of exporting. Cadot, Fernandes et al. () Tunesia, FAMEX export promotion programme –, FAXEX beneficiaries,  control firms EPP firms above a minimum size (measured by turnover) and minimum age of two years Short run and longer term impact on export levels and export diversification across destination and products Propensity score weighted regression, weights obtained from probit regression for selection into FAMEX programme including fixed effects Positive short-run effects on intensive and extensive export margins, but no effects after three years have been found. The results indicate heterogeneous effects on size classes with a positive impact on export levels for medium-sized firms only. Breinlich et al. () United Kingdom; export promotion information July , February ,  UK manufacturing firms EPP SMEs in the UK. A brochure was provided by the UK trade and investment. The brochure included information on benefits from exporting reported by other UK Perceived benefits of exporting, perceived export barriers and export status, export value, number of destination served, RCT The authors find providing information on exports has an asymmetrical effect on perceived exporting benefits, perceived export barriers, and actual export behaviour. The effect is negative on non-exporters’perceived exporting benefits and perceived exporting barriers with somewhat 62 S. Srhoj et al. Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings firms, and case studies describing the successful export experience of firms. and number of products exported negative effects on exporting behaviour. On the other hand, the effects are positive for firms already exporting before the treatment. Cassey and Cohen () United States; export promotion –, unique firms reporting  cases of assistance EPP all Washington state firms. Export assistance programme (EAP) is designed to directly address the needs of SMEs to access foreign markets by offering free services: () connecting interested firms with appropriate resources and () direct assistance in an export transaction. Log of employment PSM DiD The results display that firm participation in an export assistance programme increases firm-level employment fleetingly, but not in subsequent periods, i.e. the employment effects of the policy are shortlived and disappear after at most two quarters. There is no statistically significant impact of programme participation on long-term employment. Volpe Martincus and Carballo (b) Uruguay; export promotion –;  firms from which  treated EPP Uruguay’s institute for promotion of investments and exports of goods and services (URUGUAY XXI). Activities related Probability of entering a new country market; probability of entering a new OECD country Matching DiD (for continuous outcomes) discrete choice model with unobserved The authors find positive effect of export promotion activities on firms’ new export destination markets, especially within the Latin american and Caribbean regions as well as the introduction of the new differentiated Export Boosting Policies and Firm 63 Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings to trade promotion assistance. market; probability of entering a new product market; probability of entering a new differentiated product market; total exports; number of countries; products heterogeneity (for binary outcomes); products. There is no evidence of a positive effect on exporting to the more advanced OECD countries or on exporting new products in general. Kim et al. () Vietnam; export seminars –; firms EPP -day seminars on export promotion for SMEs in traditional industrial clusters in the apparel and textile industry. Dummy for participation; index for preparation for exporting activity; dummy for accessing e-cus- toms website; dummy for willingnesstoexport Two-stage least squares (IV) The results show information provision did not encourage unproductive firms to engage in exporting activity. Large firms were more likely to start exporting directly to foreign buyers shortly after the seminars; however, these effects disappear two years after the seminar. The authors find positive spillover effects of the seminar on non-participants through information exchange networks of firms within each industrial cluster in the village. 64 S. Srhoj et al. Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings Rincón-Aznar et al. () United Kingdom, UK trade and investment (UKTI) services  , UKTI client data base matched with firm-level data from other sources EPP thirty-two different UKTI service categories. Growth in turnover, employment, productivity and overseas turnover; probabilityofreporting overseas turnover, probability of survival DiD PSM UKTI support had a positive impact on turnover growth and a more modest impact on labour productivity, but none on employment expansion. Support is positively linked with firm survival and improvement in the total value of exports of a firm, the value of turnoverofitssubsidiariesabroadora combination of the two. Mion and Muuls () United Kingdom, UL trade and investment (UKTI) services  , UKTI client data base matched with firm level data from other sources EPP services provided by UKTI. Growth of firms’ goods exports PSM; heckman selection model Strong evidence that the use of UKTI services positively affects firms’goods export performance along the intensive and extensive margins as well as across different markets and groups of firms. The fmpact of UKTI support spans on both, new exporters and current exporters. Hiller () Denmark, Danish export association (DEA) membership (private organisation)  ,firmlevel data (machinery sector) EPP promotion of trade between Danish and foreign firms. Export sales, coverage of foreign markets, number of traded products Matching (PSM) Positive causal effect of membership in private export association on growth of exports and average value per product in the first year after entry, and on growth rate of country coverage two years after entry. Export Boosting Policies and Firm 65 Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings Atkin et al. () Egypt; randomised experiment –, Egypt,  firms Foreign demand shock (arranging a foreign business opportunity) rug producers with less than employees. Initial opportunity to fill the orders by producing  mof rugs (approx.  weeks of work). Profits, quality, productivity, technical efficiency. RCT A positive effect on profits and quality, as well as a negative effect on output per hour have been found. The authors argue for learning-by-exporting wherebyexportingimprovestechnical efficiency. This is argued with documented positive effects on quality and productivity, in addition to showing, when asked to produce an identical domestic rug, treatment firms produce higher-quality rugs and do not take long to do so. This evidence is accompanied by improvements in learning curves and documented knowledge flowing between foreign buyers, the intermediary, and the producers and no evidence that firms make monetary or time investments in upgrading, or pay, even implicitly, for the knowledge they receive. Badinger and Url () Austria, public export credit guarantees , firms % used export credit guarantees Public export credit guarantees alleviate trade frictions arising from difficulties in financing exports. Firms’exports Two-stage least squares (IV) A substantial, economically and statistically significant effect of export credit guarantees on exports, ranging from  to  percent. 66 S. Srhoj et al. Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings Agarwal et al. () Sweden, public export credit guarantees –, treated firms Public export credit guarantees Export status, export value, value added, employment, value added per employee Matching DiD, fuzzy RDD No effect on employment, value added and value added peremployee, but positive effects on export status and export value. Authors find effects to be strongest for firms of smaller size. Effects are also pronounced for first time users and in service sectors. Girma et al. () China; production subsidies –, firms with more than $, annual turnover in Chinese manufacturing industry;  treated and  control firms. Public grants for exporting Dummy: For firms’export status, for firms’ involvement in exports processing, for exporting final products, total exports divided by sales, export processing divided by sales, final products exported divided by sales Generalised PSM The direct effect of subsidies on the probability to export to be always positive was found. The effect is increasing for firms in clusters with low levels but diminishes for high levels of subsidisation. Spillover effects show subsidising firms had a negative impact on the export propensity of non-subsidised firms. This effect becomes stronger with a higher proportion of subsidised firms in a cluster. For a very large share of subsidised firms, the effect decreases but remains negative. Export Boosting Policies and Firm 67 Table :(continued) Authors Country of analysis, programme Period, sample Policy type & target Outcome variables Empirical approach Findings Helmers and Trofimenko () Colombia, export subsidies –, manufacturing firms with ten or more workers Public grants for exporting supporting exporters and domestic firms producing intermediate goods for exporters. A subsidy rate of –% per peso of the export sales value. Total export value Heckman model; ANOVA; Autoregressive distributed lag (ADL); GMM The results indicate a positive effect of subsidies on export (intensive margin). The effect is diminishing with the amount of subsidy and the degree of a firm’s connectedness to the government. Srhoj and Walde () Croatia; strengthening international competitiveness –, treated and  control firms Public grants for exporting firms of all size. The programme provides grant schemes to firms exclusively for exportoriented commercialisation or technology development activities. Firm-level growth in: exports, sales, value added, profits, employees, capital stock, intermediate inputs, TFP, and LP Matching DiD The export grant scheme induces additionality on firm performance but with no effects on employment and mixed findings for TFP. Technologyoriented grants have consistent and more significant effects compared to commercialisation activities (e.g. subsidising consulting for markets abroad, trade fairs). The cost-benefit analysis shows value-added created by the export grant scheme is .% higher than the grant scheme cost. Girma et al. () Germany, production-related subsidies –, sample size varies from  Public grants for exporting Export start, share of exports in total sales Matching (PSM) The research has shown exports and subsidies are positively related. No impact of subsidies on the probability to start exporting. Weak evidence for 68 S. Srhoj et al. service to the potential exporter is a private firm or an individual expert, while in other EPPs (in item 1 of Table 2) the final service is provided by public officials. 3.1.5 Grants and Subsidies for Export Production Activities Grants and subsidies provide firms with public funds to purchase machinery to expand their production facilities or catch-up with technology. Six articles 14 find positive effects of grants and subsidies for export production activities on firm performance. 3.1.6 Subsidised Export Loans Two articles find positive effects of subsidised export loans (i.e. export discount credit programme) (Akgündüz et al. 2018; Defever et al. 2020a) on firm performance. Beneficiary firms show substantially higher exports, but their profits, domestic sales (Akgündüz et al. 2018), number of exported products and markets did not have the same positive effect (Defever et al. 2020a). We call for more research on this type of EBP. 3.1.7 Public Export Credit Guarantees Two articles finda positive effect (Badinger andUrl 2013; Agarwal et al. 2018) of Public export credit guarantees on firm performance. These findings can be complemented with findings from aggregated units of analysis (i.e. Moser et al. 2008) which show credit export guarantees are particularly important for exporters located in countries with higher political risk and whenexporter is entering difficult markets. In this sense, risk mitigation could increase exports to markets where exporting firms would not otherwise sell. 3.1.8 Supply Side Bundle Three articles 15 show evidence that combining EPA works better than promoting through a single activity; however, so far this evidence focuses only on export promotion policies. Comi and Resmini (2019) show that a combination of vouchers for counselling, outgoing missions and trade fairs works better than a single export 14 Chavez et al. (2020), Girma et al. (2020, 2009), Görg et al. (2008), Helmers and Trofimenko (2013), Srhoj and Walde (2020) 15 Broocks and Van Biesebroeck (2017), Comi and Resmini (2019), Volpe Martincus and Carballo (2010) Export Boosting Policies and Firm 75 promotion activity. In a similar vein, Broocks and Van Biesebroeck (2017) show that a combination of public grants with research information provided by public EPA or a combination of participation in events organised by EPAs and research information provided by a public EPA has a stronger positive effect than a single intervention. Finally, Volpe Martincus and Carballo (2010c) show that bundled services combining counselling, trade agendas, and trade missions and fairs have the largest positive effect. Although EBPs are heterogeneous by design, there is evidence of positive effectiveness for both the demand-side and five supply-side policies, with additional evidence supporting the argument that a bundle of supply-side policies works better. Although we acknowledge the heterogeneity of policy design, given the positive effects across different policy designs, we proceed with our structured review without the breakdown of policy effects by policy type (as in Table 2). 3.1.9 Country Development and EBPs Next, we provide an overview of studies based on the country grouping of the World Bank’s World Development Report (2014: 295). There are no studies in lower-income countries and only four studies 16 in middle-income countries (Egypt, Nepal, Pakistan, and Vietnam). Nine studies 17 assess impacts in seven upper-middle-income countries (Argentina, Brazil, Colombia, Peru, Tunisia, Turkey, and China), while 20 studies 18 assess impacts in 15 high-income countries (Austria, Belgium, Denmark, Croatia, France, Germany, Ireland, Italy, Spain, Sweden, United Kingdom, Canada, United States, Chile, and Uruguay). Studies from lower-middle, upper-middle, and highincome countries report the existence, and thus the possibility, of export boosting policies having positive effects on firm performance. We refrain from making general statements about the effectiveness of policy measures by country group, but instead provide a systematic review of the studies based on reported outcome variables, firm characteristics, policy design, spillover effects, and back-of-the-envelope calculation of macroeconomic effects. 16 Atkin et al. (2017), Defever et al. (2020a), Defever et al. (2020b), Kim et al. (2018) 17 Akgündüz et al. (2018), Cadot et al. (2015), Cruz (2014), Girma et al. (2020), Helmers and Trofimenko (2013), Van Biesebroeck et al. (2016), Volpe Martincus and Carballo (2008, 2010c), Volpe Martincus et al. (2012) 18 Álvarez Espinoza and Crespi (2000), Badinger and Url (2013), Breinlich et al. (2017), Broocks and VanBiesebroeck(2017),Cansinoet al. (2013), Cassey andCohen(2017),ComiandResmini(2019),Girma et al. (2009), Görg et al. (2008), Hiller (2012), Karoubi et al. (2018), Martincus and Carballo (2010), Mion and Muuls (2015), Munch and Schaur (2018), Rincón-Aznar et al. (2015), Srhoj and Walde (2020), Van Biesebroeck et al. (2016), Van Biesebroeck et al. (2015), Volpe Martincus and Carballo (2010a) 76 S. Srhoj et al. 3.2 From Export Boosting Policy to Impact While the previous section found positive effects for all EBP types and country-level of development, this section examines the relationship between EBP and individual firm outcomes in more detail. As we discussed in the introduction, one of the distinguishing characteristics of EBPs is their ability to quickly generate positive effects on firm performance. This feature of EBPs is also of interest to policymakers who want to achieve results during their political mandate and can therefore combine EBPs with other medium-and long run policies and reforms to increase exports. Our Table 1 shows that ten articles 19 examine the time to positive effect, and eight articles find that the effect occurs in the first year after the introduction of the EBP. Since the goal of EBP is to increase exports, the first-order outcomes are the export-related outcome variables. For first-order outcomes, we report not only the direction of the effects (i.e. positive, negative, or nonsignificant), but also the magnitudes from the original studies (i.e. point estimates and standard errors). We divide first-order outcomes into five main types: first, the start of exporting by nonexporters,second,andthird,theexport-intensivemarginvariables:totalexportsand export intensity, followed by two extensive margin variables: the number of exported goods and the number of exported markets. 3.2.1 First-Order Outcomes 1. Export Initiation by a Firm Eleven articles evaluate the effect of EBPs on the start of exporting, from which eight find positive effects 20 for example, Munch and Schaur (2018) find on average 3.9 percentage points (p.p.) (±0.4 p.p.) 21 higher probability of export start in the year of support, and 5.9 p.p. (±0.5 p.p.) two years later, Van Biesebroeck et al. (2016) find 4.1 (±0.9 p.p.) to 8.6 (±1 p.p.) p.p. in Belgium and 6.8 (±1.4 p.p.) to 13.1 p.p. (±1.6 p.p.) in Peru, Girma et al. (2020) find 6 p.p. (n.a.), Broocks and Van Biesebroeck (2017) find 8.5 p.p. (±1 p.p.) while Comi and Resmini (2019) a 14.2 p.p. (±2.7 p.p.). On the other hand, three studies 22 find no significant effect on the start of exporting. In regard to the start of exporting, Görg et al. (2008) find larger grants increase the probability of firms starting to export. 19 Cadot et al. (2015), Cruz (2014), Hiller (2012), Munch and Schaur (2018), Srhoj and Walde (2020), Van Biesebroeck et al. (2016), Volpe Martincus and Carballo (2010a). Two studies find the effects do not occur in the first year (Akgündüz et al. 2018); Van Biesebroeck et al. 2015). 20 Van Biesebroeck et al. (2016, Broocks and Van Biesebroeck (2017), Comi and Resmini (2019), Cruz (2014), Girma et al. (2020), Hiller (2012), Mion and Muuls (2015), Munch and Schaur (2018) 21 Standard errors (s.e.) provided in brackets. Munch and Schaur (2018) provide ATT and t-statistic, and we calculate s.e. = estimate/t-statistic. 22 Breinlich et al. (2017), Girma et al. (2009), Görg et al. (2008) Export Boosting Policies and Firm 77 3.2.2 First-Order Outcomes 2. Firms’Export Intensity Four articles 23 evaluate the effect on export intensity, from which three find positive effects. The positive effects on export intensity range from on average 1.8% (±0.4 p.p.) (Comi and Resmini 2019) to 10% (±4.2 p.p.) (Cansino et al. 2013), while one paper finds only weak evidence (Girma et al. 2009). 3.2.3 First-Order Outcomes 3. Firms’Export Volume Twenty-one articles evaluate the effect on total exports, from which eighteen 24 find positive effects, for example, Munch and Schaur (2018) document a weak positive effect on exports in the magnitude of 5.8% (±3.3 p.p.) two years after receiving support, Van Biesebroeck et al. (2015)find 9.8% (±2.1 p.p.), Srhoj and Walde (2020) find 12.7% (±4 p.p.) 25 Van Biesebroeck et al. (2016) find a range of 19.5 (±6.7 p.p.) to 24.2% (±7.3 p.p.) (in Belgium) and 13.4 (±8.1 p.p.) to 22.5% (±6.3 p.p.) (in Peru), Broocks and Van Biesebroeck (2017) find 14.4% (±0.5 p.p.), while Volpe Martincus and Carballo (2010c) find 13.8% (±3.5 p.p.) (for the trade agenda) and 28.5% (±5.4 p.p.) (for the bundle of services), on the other hand, three studies find no evidence of a positive effect (Breinlich et al. 2017; Defever et al. 2020b; Girma et al. 2009). 3.2.4 First-Order Outcomes 4. Number of Goods Exported Twelvearticlesevaluatetheeffect on thenumber of goods exported, from whichnine find positive effects 26 for example, Van Biesebroeck et al. (2015) show on average a positive effect on the number of goods exported of 2.1% (±1 p.p.) 27 Cadot et al. (2015) find 8.6% (±3.1 p.p.), and Volpe Martincus and Carballo (2008) find 9.4% (±3 p.p.), while on the other hand three studies find no effect. 28 Volpe Martincus and Carballo 23 Cansino et al. (2013), Comi and Resmini (2019), Karoubi et al. (2018) 24 Agarwal et al. (2018), Akgündüz et al. (2018), Álvarez Espinoza and Crespi (2000), Broocks and Van Biesebroeck (2017), Cadot et al. (2015), Chavez et al. (2020), Defever et al. (2020a), Helmers and Trofimenko (2013), Hiller (2012), Karoubi et al. (2018), Volpe Martincus and Carballo (2008, 2010a, 2010c), Mion and Muuls (2015), Munch and Schaur (2018), Srhoj and Walde (2020), Van Biesebroeck et al. (2015), Van Biesebroeck et al. (2016) 25 It should be noted, in comparison to other point estimates provided in this sentence, apart from Srhoj and Walde (2020) who estimate the effects of export-oriented public grants, other studies in the sentence estimate the effects of EPP. 26 Álvarez Espinoza and Crespi (2000), Cadot et al. (2015), Defever et al. (2020b), Hiller (2012), Mion and Muuls (2015), Broocks and Van Biesebroeck (2017), Van Biesebroeck et al. (2015), Volpe Martincus and Carballo (2008, 2010c) 27 This estimate is sensitive in some specifications. 28 Breinlich et al. (2017, Defever et al. (2020a), Martincus and Carballo (2010) 78 S. Srhoj et al. (2010a) in Uruguay for firms with a higher share of differentiated products find higher probability to start exporting additional differentiated products, but they do not find a positive effect on exporting new products in general. 3.2.5 First-Order Outcomes 5. Number of Export Markets Twelve articles evaluate the effect on the number of countries exported to, from which 11 29 find positive effects, for example, Van Biesebroeck et al. (2015) find on average a positive effect on the number of export markets of 2.5% (±0.7 p.p.), 30 Volpe Martincus and Carballo (2008) find 7.5% (±2 p.p.), and Cadot et al. (2015) find 10.4% (±2.2 p.p.), while one article finds no effect (Defever et al. 2020a). In addition to the extensive margin with respect to the number of countries served, it is also worth noting the mixed results in terms of the type of new countries served. Broocks and Van Biesebroeck (2017) in Belgium find on average positive effects on entering market of non-EU countries, which include non-OECD countries (6.1 p.p. (±0.7 p.p.)), OECD countries (4.8 p.p. (±0.6 p.p.)), non-OECD G20 countries (2.6 p.p. (±0.4 p.p.)), and Switzerland and Norway (2.5 p.p. (±0.4 p.p.)). On the other hand, Volpe Martincus and Carballo (2010a) find positive effects on new export markets in Uruguay when the export markets are neighbouring countries in the Latin America and Caribbean region, but not in the more advanced OECD countries. Second-order outcomes of interest to economists and policymakers are inputs to the production function of firms and their outputs, including sales, value added, profits, employment, capital, and productivity. 3.2.6 Second-Order Outcomes 1: Firm Sales, Value Added and Profits Nine articles evaluate the effect of EBPs on sales, and all 31 find positive effects. Three articles evaluate the effect on value added from which two find positive effects (Munch and Schaur 2018; Srhoj and Walde 2020) and one no effects (Agarwal et al. 2018). 32 Three articles evaluate the effect on profits, from which two find positive effects 33 and one study finds no effects (Akgündüz et al. 2018). 29 Álvarez Espinoza and Crespi (2000), Cadot et al. (2015), Hiller (2012), Mion and Muuls (2015), Broocks and Van Biesebroeck (2017), Volpe Martincus and Carballo (2010a), Van Biesebroeck et al. (2016), Van Biesebroeck et al. (2015), Volpe Martincus and Carballo (2008, 2010c) 30 This estimate is sensitive in some specifications. 31 Akgündüz et al. (2018), Cansino et al. (2013), Comi and Resmini (2019), Helmers and Trofimenko (2013), Hiller (2012), Munch and Schaur (2018), Rincón-Aznar et al. (2015), Srhoj and Walde (2020), Volpe Martincus and Carballo (2010a) 32 Agarwal et al. (2018) find positive effect on the subsample of small firms and for novice users. 33 Atkin et al. (2017), Srhoj and Walde (2020) Export Boosting Policies and Firm 79 3.2.7 Second-Order Outcomes 2: Firm Inputs SrhojandWalde(2020)find positive effects of export-oriented grantsoncapital.Eight articles evaluate the effect on employment out of which five find positive effects (Akgündüz et al. 2018; Broocks and Van Biesebroeck 2017; Cansino et al. 2013; Cassey and Cohen 2017; Munch and Schaur 2018), one article findspositive effects to be shortlived (Cassey and Cohen 2017) and three articles find no effects (Agarwal et al. 2018; Rincón-Aznar et al. 2015; Srhoj and Walde 2020). 3.2.8 Second-Order Outcomes 3: Firm Productivity Four articles evaluate the effects on productivity, of which two find positive effects (Atkin et al. 2017; Munch and Schaur 2018) and two articles find no effects (Agarwal et al. 2018; Srhoj and Walde 2020). We now delve deeper into several study details: Heterogeneity by firm size, export experience, and sector. We then report and discuss policy spillover effectsand the documented back-of-the-envelope calculations of macroeconomic effects based on microeconometric estimates. 3.3 Heterogeneity of Export Boosting Policy Effects The empirically identified heterogeneity of effects can help researchers understand the mechanisms by which export boosting policies operate and can help policymakers design more effective policies. It should be emphasised that heterogeneity was found along several dimensions and much remains to be learned. Most evidence in the structured review is found for firm size, with some evidence for sectors, and export experience. 3.3.1 Firm Size Small firms are shown to better respond to EBP. One of the most important activities in expanding abroad is finding business partners in the foreign market (e.g. distributors, customers), but even once a business partner is found, the question is how reliable they will be. The search for business partners can be faster and more successful the larger the business network (Chaney 2014), so a policy focused on finding business partners might be more helpful for smaller firms (Munch and Schaur 2018). Compared to larger firms, smaller firms are less likely to have separate export departments, but have lower levels of skills and organizational knowledge, so export boosting policies could be particularly effective (Cruz et al. 2018). Finally, smaller 80 S. Srhoj et al. firms have lower productivity, cash, assets, and potential for bank loan, all of which are important for promoting firm growth, compared to larger firms (Coad and Srhoj 2020; Rostamkalaei and Freel 2016; Wagner 2007, 2014). Fourteen articles evaluate the effect on firms of different sizes or focus only on small firms, of which eleven find positive effects on small firms, six find positive effects on medium-sized firms, and only three find positive effects on larger firms. Technically, these studies use quite different thresholds for grouping firms by size, e.g. Atkin et al. (2017) focus only on firms with up to five employees, Munch and Schaur (2018) divide firms into categories based on the number of employees, namely up to 20, 20–50, and more than 50 employees, Cadot et al. (2015) define medium-sized firms as firms with 20–100 employees, Volpe Martincus and Carballo (2010a) and Akgündüz et al. (2018) subdivide firm size based on the export distribution of firms. 3.3.2 Firm Export Experience Fifteen articles investigate impact with respect to export experience, from which ten 34 find positive effects on firms with some export experience, while six find positive effects on firms with no export experience. 35 Along these lines, Eaton et al. (2021) suggest search to identify new clients is costly even when a firm already exports, which is exactly what is empirically found, for example, Van Biesebroeck et al. (2015) for EPP and Agarwal et al. (2018) for guarantees find positive effects for firms with export experience. 3.3.3 Sectors Most studies that find positive effects focus on firms in the manufacturing sector; one study finds positive effects on both the service and manufacturing sectors (Agarwal et al. 2018), while one study finds heterogeneity (Karoubi et al. 2018) with positive effects on firms in the service sector but no effects on firms in the manufacturing sector. The paucity of studies examining the effect of EBP on firms in the service sector is a suggestion for further research. Karoubi et al. (2018) also find positive effects for profitable but not for loss-making firms. 34 Agarwal et al. (2018), Akgündüz et al. (2018), Breinlich et al. (2017), Broocks and Van Biesebroeck (2017), Comi and Resmini (2019), Görg et al. (2008), Kim et al. (2018), Mion and Muuls (2015), Van Biesebroeck et al. (2015), Volpe Martincus and Carballo (2010b), Volpe Martincus et al. (2012) 35 Cansino et al. (2013), Cruz (2014), Broocks and Van Biesebroeck (2017), Mion and Muuls (2015), Volpe Martincus and Carballo (2010a), Volpe Martincus et al. (2012) Export Boosting Policies and Firm 81 In summary, EBPs are more effective for smaller firms, while evidence exists in favour of positive effects on manufacturing firms, and both, firms with export experience, and non-exporters with export potential. 3.4 Spillovers and Cost-Benefit Analysis As shown in Table 1, all 33 articles examine direct effects on intensive or extensive export margin or firm performance. Of the 33 articles, six 36 examine possible spillover effects on firms that do not directly benefit from EBP. Examining spillover effects is important for at least two reasons, one economic and one methodological. Fromaneconomicperspective,atruecost-benefitanalysis(CBA)shouldcalculatenot only direct spillover effects but also indirect spillover effects. In particular, if the spillover effects are large, they should be included in the CBA calculation. In this sense, one of the economic justifications for government intervention with EPPs is to address market failures in the form of information spillovers, and therefore the study of spillovers is particularly important. Evidence from France (e.g. Koenig et al. 2010) suggests that when a firm is active in a foreign market, the probability of exporting increases for firms close to the exporter. In terms of methodological rationale, note that 28 articles identify the effects of EBPs using matching algorithms (alone or with DiD), two using the IV approach, two using RCT, and two using fixed effects estimation (see Table 1). Matching, IV, and RCT are all counterfactual methods with the same basic assumption, the stable unit treatment value assumption (SUTVA), which essentially assumes that there are no spillover effects from treated firms to control firms. When the SUTVA is violated, the estimates are biased: On the one hand, the effect would be overestimated if there are negative spillover effects on the control group such that the use of EBP leads to a decrease in the control group, while on the other hand, the effect would be underestimated if the treatment leads to an increase in the control group. 3.4.1 Spillovers Sixstudiesusefivedifferentapproachestoidentifyspillovereffects. Atkinet al. (2017) use geographic proximity, Kim et al. (2018) assume information exchange networks within the same village, Broocks and Van Biesebroeck (2017) use NACE 4-digit sectors, Cruz (2014), Cadot et al. (2015) consider the same region and sector, and Girma et al. 36 Atkin et al. (2017), Cadot et al. (2015), Broocks and Van Biesebroeck (2017), Cruz (2014), Girma et al. (2020), Kim et al. (2018) 82 S. Srhoj et al. (2020) use cluster membership. Of these six articles, three 37 report positive spillover effects, two report no spillover effects (Atkin et al. 2017; Cadot et al. 2015), and one reports negative effects (Girma et al. 2020). Two studies require further comment. Broocks and VanBiesebroeck (2017) show within thesame NACE 4-digit industry, that the (indirect) spillover effects of an EPP on the probability of starting to export are positive, on average 0.7 percentage points, which is ten times smaller than the direct positive effect. Girma et al. (2020) estimate the spillover effects of export subsidies within a cluster and find that they have a large negative effect (about 30 p.p.) on the propensity to export of nontreated firms in the cluster. Moreover, this negative effect increases the higher the share of treated firms in a cluster, while the negative effect decreases once the share of treated firms in a cluster is very high. 3.4.2 Cost-Benefit Analysis Results on spillover effects remain mixed; however, if positive, they should be included in the CBA calculations. Six articles use back-of-the-envelope calculations (without spillover effects) to provide insights into CBA by comparing direct EBP costs to benefits created, whith benefits measured based on microeconometric causal effects on value added in two articles (Munch and Schaur 2018; Srhoj and Walde 2020) and on the amount of exports in four articles. 38 Using additionality in value added to estimate benefits in two small open economies, Croatia and Denmark, Srhoj and Walde (2020) find for export-oriented public grants that the benefits to be 139.5%, while Munch and Schaur (2018) find for EPP the benefits to be 300% of the direct policy costs. When export additionality is used, benefits are reported to massively exceed EPP costs, by 16–29 times in Belgium (Broocks and Van Biesebroeck 2017), 19 times in Tunisia (Cadot et al. 2015) 39 9 times in Italy (Comi and Resmini 2019) and 1.2 to 11.7 times in Pakistan (Defever et al. 2020a). Few studies report programme costs and find no effect on export value. For example, Defever et al. (2020b) report programme costs of about 4 million US dollars a year for a cash transfer programme in Nepal, which was an ad-valorem subsidy of 1% or 2% of the export value of governmentselected export products types, but find no positive effect on export value, so the scheme was not cost-effective. Defever et al. (2020a) show that the additional exports triggered by subsidised loans for long-term investment in fixed assets (LTFF) exceeded the direct costs of the 37 Broocks and Van Biesebroeck (2017), Cruz (2014), Kim et al. (2018) 38 Cadot et al. (2015), Broocks and Van Biesebroeck (2017), Comi and Resmini (2019), Defever et al. (2020a) 39 In the paper by Cadot et al. (2015) we compare additional exports from Table 15, row “c”(TY) and total private and public cost of the FAMEX programme. Export Boosting Policies and Firm 83 scheme by 11.7 times, while the additional exports triggered by subsidised loans for working capital (EFS) exceeded the direct costs of the scheme by 1.2 times. Defever et al. (2020a) present a first CBA showing that subsidised loans for long-term investment in fixed assets increase export value more than subsidised loans for working capital. Along these lines, Srhoj and Walde (2020) suggest that public grants for exporters’technological upgrading create more value in the economy than grants for commercialization activities such as international product placement. Finally, it should be noted that two studies go a step further and attempt to construct a CBA with benefits based on tax revenues (Cadot et al. 2015; Defever et al. 2020a). This is a different angle in conducting a CBA that focuses not on how much additional exports EBPs generate, but how much additional tax revenue. Cadot et al. (2015) show for Tunisia that the additional tax revenues and net after-tax gains are twice the total cost of the programme. However, Defever et al. (2020a) show that both types of subsidised loans in Pakistan (EFS and LTFF) are not cost-effective in increasing exports because the additional tax revenues do not cover the financial costs of the two types of subsidised loans (only 7.18% for EFS and 69.6% for LTFF). 40 4 Conclusion Boosting exports is a policy goal for countries around the world and is especially important for small open economies that want to increase the prosperity of their citizens. Export boosting policies (EBPs) support firms in the final stages of the commercialization process, and our objective was to answer the question, are EBPs effective in the short-run? To this end,we provided a structured review of 33 rigorous microeconometric studies from 26 countries on five continents. All reported studies use robust microeconometric methods, however, matching algorithms are probably the least compelling within these microeconometric tools, but are used in 25 of 33 included articles. Matching is a method that has a weakness –unobservable confounders, and this may be even more pronounced if the control group did not intend to participate in the EBP. This raises the question of potential bias: How large is the effect of selection in the EBP compared to the effect of the EBP? This question is difficult to answer. 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