There is no evidence that that country has done this for a long time and has been successful (Love & Lattimore, 2009). Most of the goods that countries sell are not what we see on store shelves, but what is used to make it, from machinery to IT products. Thus, exports were one of the main drivers of growth in one of the largest economies now, China (World Bank, 1993).
This is considerably less than the results of Chile's leading trading partners - China and the United States ($12.9 billion and $12.8 billion, respectively) (Atlas Media). An early version of the model predicted bilateral trade due to two factors: country GDP and geographic distance (Kabir, Salim & Al-Mawali, 2017).
Importance of export promotion activities
- Effects of export promotion on national export
- General effect of EPA on the firm export performance
- Export promotion programs: case of SMEs
- Export promotion on different stages of export involvement
- Research gap
Cadot, Fernandez, Gourdon, and Mattoo (2015) investigated the effects of export promotion programs for the case of Tunisian firms. There are several studies that observe the effect of export promotion programs on the small and medium-sized enterprises. Results show the positive effect of export promotion program application on other dimensions of export performance.
Export promotion activities also have effect on the firms in the time of crisis (Martincus, 2016). Also, the survival rate of the firms that used export promotion activities was much higher. Export promotion programs have indirect positive effect on export performance of the companies by improving marketing capabilities of the company participants (Wang, Chen, Li, 2017).
Export promotion activities affect companies even in times of crisis (Martincus, 2016).
Overview of existing export agencies
From the beginning of the 21st century, dramatic changes took place in the short-term export credit market: the main role passed to private insurers, as a result of which there was a need to re-evaluate the role of state export agencies. For the OECD, it was a chance to get rid of the practice of subsidizing export credits by the state and reducing the role of export credit agencies in promoting national exports. From the point of view of the OECD, it is necessary that export agencies do not compete, but contribute to the growth of the private sector of the market.
The booming world economy, irreversible globalization and the unprecedented growth in the volume of foreign trade operations at the beginning of the 21st century have led to increased international competition. In many countries, export agencies have chosen to change traditional business models by moving from a lender (insurer) concept to a trade-oriented type of quasi-market player. Trade Promotion and the US and Foreign Trade Service (Trade Service) are the main trade facilitation unit of the ITA.
These agreements and partners account for 64% of the world's population and 86% of global GDP (ProChile, 2018). Having such a widespread network of offices makes it possible to share information about Chilean goods and services and the characteristics of the companies that offer them. These seminars are designed to educate Chilean exporters about the markets where they want to locate their products or services.
With a guarantee from EKF, the companies have support from the Danish state, and this means something in the world outside Denmark's borders. With EKF's guarantee, the Danish company is protected against the customer's financial risks abroad, early termination of the contract or bankruptcy. EKF can also help finance Danish companies by providing a guarantee to the company's bank, which allows the company to use their financing more efficiently.
Research methodology
Difference-in-difference method of analysis
Method used for defining effects of export promotion on firms of a different size
There are also cases where companies use different activities simultaneously and it is difficult to understand which activity caused the change in the volume of exports. To understand the value of different export promotion activities open-ended survey questions should be used. Open-ended questions usually take the form of a text box in a survey, and allow your respondents to provide a unique answer (as opposed to providing a list of predefined answers to choose from).
Often, it is these quotes or examples that create stronger statements than many averages and percentages. If only numbers were evaluated in questions 1 and 2, a subjective view of the company can be evaluated here. Also, the company can share its thoughts on the individual strengths of the activities that lead to a certain result, which is also noted in this survey.
The value is assessed not only on the basis of the result achieved by the use of the promotional activity, but also on the exclusivity of the acquisition of the service. If this service can be obtained under almost the same terms, this service would be worth less. Conversely, if this service can be obtained exclusively through export promotion activities, the value is greater.
The purpose of this method is to define the trends of the use of different export promotion activities and to evaluate the advantages and disadvantages of each activity. This will lead to an understanding of which specific activity is most valuable to the exporting companies.
Data collection
Export agencies were contacted by request from the database of the companies receiving export promotion activities and the database of national company exporters. 16 of them stated that it is impossible to get this type of information due to the internal policies of the agencies. Regarding export data at company level, it was stated that it is impossible to receive this data due to national policy on trade secrets.
Again, data on companies that used ProColombia's export promotion activities was not available due to agency policy issues. Since only agricultural companies are the subject of the study, they were identified by the export code in the database. The next step in data collection is to identify which companies have used ProColombia's export promotion programs.
All firm contacts were obtained through an internet search of company names declared in the customs database. The lowest threshold for the company's export volume was set at $100,000. The year of service received tells us when the company's "treatment" began.
Almost all companies know ProColombia as an institution for export development. This sample was created based on the results received from the survey sent for answering the 1st question. As a result, 12 responses were received from the companies users of ProColombia's services with in-depth comments on the services obtained.
Findings
Econometric results on the effects export promotion have on firms of different size…
Value of different export promotion activities
For the companies from different industries, the value of the same export service may be different. Existing literature lacks the studies of the effects of export promotion programs on the companies from the relevant industry. The importance of export promotion programs for the agricultural companies of Colombia was highlighted in the study.
For example, there was research into the effects of export promotion programs on producers. This study, on the other hand, shows the results of export promotion activities on the producers of the products with low added value. Another contribution made by this study is the comparison of the same export promotion programs on farms of different sizes.
In order to obtain these databases of exporting companies receiving export promotion services, it is necessary to obtain. Another limitation is that only the volume of exports as a result of export promotion activities was investigated. In order to understand whether there is a positive effect of export promotion activities on the export performance of agribusiness firms, this research was conducted.
To answer the question about the value of different export promotion activities, the results of the survey sent to the companies were presented. Companies should consider using export promotion activities as a way to increase their export volume. Seeking foreign clients through export agencies is a valuable channel for acquiring clients abroad.
Implication of the research
Theoretical implications
However, there has been no study comparing the effects that the same export promotion programs have had on small and large firms. Therefore, if there were effects of export promotion activities, for example by 5 or 6 export agencies, the results could reduce the likelihood of different export agency performance. It could also be interesting to qualitatively investigate how the receipt of export promotion activities affects internal business processes in companies.
Because there is an option, such as some techniques seen in the work of the export agencies can be seized and implemented in the work of the exporting companies. The study shows that using export promotion activities helps companies that produce and export low-tech products such as coffee and flowers to overcome international barriers and increase the amount of goods exported. If comparing the impact that export promotion activities have on small firms and large firms, small firms get more value from export promotion programs.
Also, if the data on other characteristics of the company such as the number of exporting countries, the number of products exported, organizational capabilities can be obtained, the research on the effects of export promotion programs on these characteristics can be done. Understanding public export promotion programs in an emerging economy: the case of Malaysian SMEs. 34;The impact of export promotion on export market entry," Journal of International Economics, Elsevier, vol.
The effect of government-designed export promotion service utilization on the goal achievement of small and medium-sized enterprises: a multidimensional view of export performance. Government initiatives for export promotion: awareness, participation and perceived effectiveness among Swedish environmental technology firms. resources and capabilities: Effects on strategy, competitive advantage, and performance.
Limitations and suggestion for future studies
