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Abstract

This paper evaluates the impact of two large export finance support schemes on firm-level export performance. The Export Finance Scheme (EFS) and the Long-Term Finance Facility for Plant & Machinery (LTFF), provide loans at subsidized interest rates for Pakistani exporters to finance working capital and the purchase of machinery and equipment respectively. We combine customs data with information on firms’ participation in each program between 2015 and 2017 and use matching combined with difference-in-differences to estimate the effect of the subsidies on firms’ export values, the number of products exported and the number of destinations they serve. We find that both programs deliver a large and positive impact on export growth rates—primarily along the intensive margin—and do so in an effective way relative to the direct financial cost of the subsidies.

Publication Type:	Article
Additional Information:	This is the peer reviewed version of the following article: Defever, F., Riano Londono, A. & Varela, G. (2024). ​Evaluating the Impact of Export Finance Support on Firm-level Export Performance: Evidence from Pakistan. Canadian Journal of Economics which will be published in final form at https://onlinelibrary.wiley.com/journal/15405982. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Publisher Keywords:	Trade Finance; Export Subsidies; Working Capital; Machinery and Equipment; Export margins; Pakistan
Subjects:	H Social Sciences > HG Finance
Departments:	School of Policy & Global Affairs School of Policy & Global Affairs > Economics
SWORD Depositor:	Symplectic Administrator

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