City Research Online

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:	© 2025 The Author(s). Canadian Journal of Economics/Revue canadienne d'économique published by Wiley Periodicals LLC on behalf of Canadian Economics Association. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
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 > Department of Economics
SWORD Depositor:	Symplectic Administrator

Export

Downloads