Research Papers in Economics, Department of Economics, Stockholm University
Sizing Up the Impact of Embassies on Exports
() and Rikard Forslid
Abstract: The purpose of this study is to test for the effects of
trade promotion via the foreign service. Heterogeneous firms trade theory
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; (follow links to similar papers)
JEL-Codes: D21; D22; F12; F15; (follow links to similar papers)
25 pages, June 26, 2017
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