Alessandro Palma (Gran Sasso Science Institute) (webinar)

“Export Management and Labor Demand: Evidence from an Italian Policy Experiment”

Abstract: We study the effect of a subsidy program for hiring a Temporary Export Manager (TEM) on firms’ outcomes and labor demand. Firms were invited to apply and subsidies were allocated on a first come, first served basis. We use a local differences-in-differences design based on time of arrival of firms application to compare the performances of subsidized firms who were eligible to receive the voucher to firms who were not eligible, in the neighbourhood of the time of exhaustion of the budget. Eligible firms experienced an increase in revenues, ROE, profits and value added per employee. These performances were accompanied by a significant growth in export in extra-EU markets in the fourth year after receiving the subsidy. Before starting to export, TEMs were also effective in stimulating ‘good’ labor demand, with an overall increase of the workforce of about 13%, mainly composed by full time and permanent employees.

J.E.L. codes: L2, L38, 040, F14, H2, F2
Keywords: SMEs, export subsidy, labor demand, natural experiment, click-day