A comparative study on export promotion programs: Manufacturing versus services

Abstract

This paper provides a comparative study on the effectiveness of exportpromotion programs between manufacturing and service firms, basedon a survey analysis for Korean companies. Specifically, we explorethe relationships among the characteristics of individual firms, the keybarriers to trade for these firms and the effectiveness of EPPs. First ofall, our estimation results show that the net impact of exportpromotion programs on individual firms’ export performance, aftercontrolling for firm-level heterogeneity, tends to be more significant formanufacturing firms than for service firms. Second, regardless of anindividual firm’s status or characteristics, bottlenecks in overseasmarketing, such as the lack of marketing experts and the difficulty insecuring foreign distribution networks, are the most bindingconstraints to exporting activities. Third, while firms have differentneeds for public export support depending on their own characteristics,this mechanism is more complex for service firms relative tomanufacturers.