Export promotion and performance

The purpose of this paper is to investigate the effects of an export promotion program on export performance over the period of 2012-2016 using firm level data from Korea Enterprise Data (KED) in Korea. Firms face a variety of obstacles when entering overseas markets. Therefore, most governments provide elaborated institutional arrangements to help their export firms. In this regard, KOTRA, Korea’s Trade and Investment Promotion Agency, presents exemplary practices to help firms minimize the implied costs whereas to maximize the overseas business opportunities. This paper examines the impact of an export promotion program such as providing local office, specialized counseling, technical assistance, market information as well as match-making with local buyers. To best evaluate its contribution, this paper compares the performance of firms that have experienced export promotions with firms without any assistance by KOTRA, using firm level panel dataset (13,000 firms). Rigorous micro-econometric techniques like difference-in-difference are employed to identify the effects of export promotion activities by KOTRA. As the comparable groups of firms and correct sample counterpart are constructed by types of export promotion activities, and non-activities, comparative tests by type of promotion activities provided by KOTRA will be performed. It is expected that export promotion actions are associated with increased exports. Export performance also will vary by the type of promotion, firm size, and industries engaged in. This paper measures how much different performance among the comparable groups are. This paper has important implications for the literature on international trade by assessing the effectiveness of public interventions specifically designed to foster exports and uncovering the effective channel of promotion for the special case of Korea.