Free lunch or vital support? Export promotion in The Netherlands

Abstract

Purpose: The purpose of this paper is to add to the debate concerning the merits of export promotion efforts by governments by investigating the effect of export promotion program (EPP) participation on the export performance of Dutch small and medium-sized enterprises (SMEs). Design/methodology/approach: The authors confront participation data of an EPP targeting SMEs with rich firm-level data and use propensity score matching techniques combined with regression analysis. Findings: The authors show that exports generated by participants do generally rise in the years after program entry, however, export growth does not outpace that of comparable, but unsupported firms. Nonetheless, there is some evidence suggesting that export shares in sales rise faster among program entrants, particularly in the first and second years after participation. Furthermore, the authors present evidence suggesting that the probability of becoming a permanent exporter is higher for participants relative to beginning exporters that did not receive support from the program. Originality/value: The analysis contributes to the still relatively small literature dealing with the impact of government export promotion instruments on export performance using firm-level micro-data. The subject of analysis are Dutch small businesses. SMEs, particularly operating in advanced economies, are a group that is not frequently considered separately in this respect.