INTERNATIONAL BUSINESS POLICY DESIGN FIRMS’ ENDOWMENT AND INCENTIVES’ EFFECTIVENESS



Date:26/06/2019.


We investigate the appraisal of the value of pro-internationalization policy incentives. Using data for a small and open economy we find, contrary to prevailing belief, that better endowed firms place greater importance on incentives, with no evidence for the presumption that, by design, incentives appeal more to export-only firms. Rather, policy appeals almost exclusively to outward investors although, in line with theory, financial incentives appeal to more indebted investors. Our findings suggest an overspill in policy attraction from exporters to foreign investors, and the need for improved policy design.





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