TY - JOUR
T1 - Third-Country Effects of Export Incentives
AU - Ledyaeva, Svetlana
N1 - Publisher Copyright:
© 2023, The Author(s).
PY - 2023/4/4
Y1 - 2023/4/4
N2 - The existing empirical literature on export promotion policies is almost exclusively focused on their effects for domestic exporters. This paper contributes to this research by empirically examining the effects of export incentives for third-country exports. Using novel CEPR Global Trade Alert data, the study investigates the impact of Brazilian, Indian and Chinese export incentives on exports of OECD and emerging countries. The findings confirm the existence of negative third-country effects of export incentives and demonstrate that these effects are expectedly larger for foreign exporters who exhibit higher similarity in geography of export with subsidized exporters. These results further point to the importance of destination diversification in export strategies. Following strategic trade theory, the study further examines the moderating effect of industries` proclivity to imperfect competition for third-country effects of export incentives. Whereas Chinese export incentives, as predicted by strategic trade theory, cause largest negative effects in industries with higher proclivity to imperfect competition, Brazilian and Indian export incentives, contrarily, cause larger negative third-country effects in industries with lower proclivity to imperfect competition.
AB - The existing empirical literature on export promotion policies is almost exclusively focused on their effects for domestic exporters. This paper contributes to this research by empirically examining the effects of export incentives for third-country exports. Using novel CEPR Global Trade Alert data, the study investigates the impact of Brazilian, Indian and Chinese export incentives on exports of OECD and emerging countries. The findings confirm the existence of negative third-country effects of export incentives and demonstrate that these effects are expectedly larger for foreign exporters who exhibit higher similarity in geography of export with subsidized exporters. These results further point to the importance of destination diversification in export strategies. Following strategic trade theory, the study further examines the moderating effect of industries` proclivity to imperfect competition for third-country effects of export incentives. Whereas Chinese export incentives, as predicted by strategic trade theory, cause largest negative effects in industries with higher proclivity to imperfect competition, Brazilian and Indian export incentives, contrarily, cause larger negative third-country effects in industries with lower proclivity to imperfect competition.
KW - 511 Economics
KW - Export incentives
KW - Market concentration
KW - Proclivity to imperfect competition
KW - Similarity in geography of export destinations
KW - Third-country effects
UR - http://www.scopus.com/inward/record.url?scp=85151541023&partnerID=8YFLogxK
U2 - 10.1007/s11079-023-09714-9
DO - 10.1007/s11079-023-09714-9
M3 - Article
AN - SCOPUS:85151541023
SN - 0923-7992
JO - Open economies review
JF - Open economies review
ER -