Non-scale endogenous growth effects of subsidies for exporters

• Type: Article in International Scientific Journal
• Date: 2012

Authors

Óscar Afonso (Author) FEP; Armando Silva (Author) Other

Journal

Title: Economic Modelling

Vol. 29 No. 4

Pages: 1248-1257

ISSN: 0264-9993

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 4 Citations

ISI Web of Science

Scopus - 5 Citations

Econlit

Scientific classification

FOS: Social sciences > Economics and Business

Other information

Authenticus ID: P-002-8C7

DOI: 10.1016/j.econmod.2012.04.019

Abstract (EN): We built a general equilibrium endogenous growth model in which final goods are produced either in the relatively skilled-labour intensive exports sector or in the relatively unskilled-labour intensive domestic sector. We show that, by affecting the technological-knowledge bias, subsidies explain the simultaneous rise in the exports sector, the skill wage premium and the economic growth rate. Then, to shed light upon the causal nexus between production-related subsidies and exports, we use a Portuguese longitudinal database (1996-2003) and implement a propensity score matching approach. Empirical results seem to prove the theoretical predictions: subsidies generate the rise in the wage premium of exporters and the increase in the relative size of export sector, even if no impact of subsidies is found in the capacity of transforming domestic firms into new exporters.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 10