Sizing Up the Impact of Embassies on Exports
Ferguson, Shon; Forslid, Rikard
Abstract
The purpose of this study is to test for the effects of trade promotion via the foreign service. The theory of trade with heterogeneous firms predicts that unilateral trade promotion allows medium-sized firms to export. We investigate the effects of trade promotion using firm-level data and information on the opening and closing of embassies abroad from the very similar neighboring countries Sweden and Norway. We use a difference-in-difference specification where firms from Norway are used as a control group for Swedish firms. Our results show that large firms as well as medium-sized firms respond to the opening of embassies.
Keywords
Heterogeneous firms; trade promotion
Published in
Scandinavian Journal of Economics
2019, Volume: 121, number: 1, pages: 278-297
UKÄ Subject classification
Business Administration
Publication identifier
DOI: https://doi.org/10.1111/sjoe.12260
Permanent link to this page (URI)
https://res.slu.se/id/publ/101557