THE EXPORT ENHANCEMENT PROGRAM'S INFLUENCE ON FIRM-LEVEL COMPETITION IN INTERNATIONAL MARKETS

The U.S. government awarded export subsidies to agribusiness firms through the Export Enhancement Program (EEP). This study analyzes (a) whether the subsidies promoted new firm market entry and (b) whether firm characteristics influenced program participation. Trade in three commodities, poultry, wheat, and wheat flour, was analyzed using firm level data. It was found that new firm market entry was not significantly higher among subsidy recipients and that past program participation strongly influenced current program participation. Although the EEP is believed to have been administered fairly, perceived or real barriers prevented some firms from using it.