Publication: Are the Benefits of Export Support Durable?: Evidence from Tunisia
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Published
2015-11
ISSN
0022-1996
Date
2016-03-10
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This paper evaluates the effects of the FAMEX export promotion program in Tunisia on the performance of beneficiary firms. While most studies assess only the short-term impact of such programs, we consider also the longer-term impact. Our estimates suggest that the average beneficiary initially saw both higher overall export levels and greater diversification across destinations and products. However, three years after the intervention, beneficiaries' export levels and diversification were no longer significantly different from those of a control group. Furthermore, the effects were heterogeneous across firms: small and large firms saw no positive impact on export levels, and even the positive impact on medium sized firms was temporary. The temporariness of the impact was not due to spillovers to non-beneficiary firms which helped them to catch up, or to greater exposure of beneficiaries to crisis-affected economies. Rather, the impact may be transient because the program did not lead to the enhancements in product quality or sophistication which could have strengthened competitiveness durably. Notwithstanding its transient effect, the relatively low-cost FAMEX still generated two Tunisian Dinars of private profits per Dinar of program expenditure, and the additional corporate tax revenue just covered the public cost of the program.
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Publication Are the Benefits of Export Support Durable? Evidence from Tunisia(World Bank, Washington, DC, 2012-12)This paper evaluates the effects of the FAMEX export promotion program in Tunisia on the performance of beneficiary firms. While much of the literature assesses only the short-term impact of such programs, the paper considers also the longer-term impact. Propensity-score matching, difference-in-difference, and weighted least squares estimates suggest that beneficiaries initially see faster export growth and greater diversification across destination markets and products. However, three years after the intervention, the growth rates and the export levels of beneficiaries are not significantly different from those of non-beneficiary firms. Exports of beneficiaries do remain more diversified, but the diversification does not translate into lower volatility of exports. 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