Date Thesis Awarded

5-2022

Access Type

Honors Thesis -- Open Access

Degree Name

Bachelors of Arts (BA)

Department

Economics

Advisor

Luis Baldomero-Quintana

Committee Members

Tanu Kumar

John Lopresti

Abstract

This paper measures the impact of a widespread trade subsidy program on the exporting sectors in which Chile faces comparative disadvantages (i.e., small exporting sectors). More specifically, I analyze the effect of export subsidies on the changes in exports experienced by these sectors in Chile between 2002 and 2013. My regression analysis utilizes data on Chilean exports from Chile’s National Customs Service. It also uses information on the eligibility requirements for receiving the aforementioned subsidies — which are worth three percent of the value of an export — from the Chilean government. This information is provided by annual legal documents that are sourced from Chile’s Library of Congress. My results suggest that the low values of subsidies provided by this program in Chile are not large enough to allow small exporting sectors to overcome the comparative disadvantages faced by Chile. Overall, the results of this study imply that the impact of a widespread subsidy program on an exporting sector depends on both subsidy size and whether the country has a comparative disadvantage in that sector.

Keywords: export subsidy, ‘simplified’ drawback program, small exporting sector, comparative disadvantage

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-No Derivative Works 4.0 License.

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