AIB 2018 Annual Meeting Minneapolis, USA. "DO BETTER ENDOWED FIRMS PLACE LOWER IMPORTANCE ON INTERNATIONALIZATION INCENTIVES?"



Date:25/06/2018.


We investigate theory and conventional wisdom in policy circles that pro-internationalization policy incentives are valued more when firms are deficient in attributes essential for tackling internationalization. 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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