Within-firm spillovers of export promotion agencies

When export promotion agencies target specific products, they can crowd-out exports of other products, if firms focus on exporting the products for which they receive assistance, or foster them, if firms leverage the know-how and contacts acquired from the program. Thus, the net effect on total exports and export composition is theoretically ambiguous. We estimate the effects of Sierra Exportadora, one of Peru’s flagship export promotion agencies, on its beneficiaries’ exports of non-sponsored products. Using a comprehensive dataset of exporters we show that beneficiary firms exports of non-sponsored products increased by 20%, roughly as much as exports of sponsored products. We show that a large fraction of this change is due to changes in the extensive margins, suggesting that beneficiary firms leveraged contacts and know-how acquired from the program to export new non-sponsored products. We find that the effects are larger for firms with more pre-program experience exporting and higher pre-treatment exports.