The opinions expressed in this paper are the sole responsibility of the authors and do not reflect the views of the Japan External Trade Organization and the Korea Trade Investment Promotion Agency. We would like to thank three anonymous referees for their valuable comments.
Do Export Promotion Agencies Increase Exports?
Article first published online: 19 AUG 2014
© 2014 Institute of Developing Economies
The Developing Economies
Volume 52, Issue 3, pages 241–261, September 2014
How to Cite
Hayakawa, K., Lee, H.-H. and Park, D. (2014), Do Export Promotion Agencies Increase Exports?. The Developing Economies, 52: 241–261. doi: 10.1111/deve.12048
- Issue published online: 19 AUG 2014
- Article first published online: 19 AUG 2014
- Manuscript Accepted: MAY 2014
- Manuscript Received: JUL 2013
- Export promotion;
- Gravity model;
In this paper, we examine the role of export promotion agencies (EPAs) in promoting exports from Japan and Korea. 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.