Bureaucratic Implementation Capacity in Export Promotion
Observational StudyReview
Public trade promotion agencies in developing nations frequently yield inconsistent results when assisting domestic manufacturers to enter foreign markets. This policy variation is often driven by differences in the administrative skills and implementation capability of public officials executing trade promotion programs abroad.
Picture this
Picture a city opening two overseas trade offices: one managed by an experienced trade expert who proactively introduces domestic furniture makers to foreign retail buyers, and another managed by an untrained bureaucrat who merely hands out paper brochures. The first office generates massive export deals for local factories, while the second office produces zero commercial results.
What the evidence says
Opening trade promotion offices in foreign markets significantly increased long-term manufacturing exports when staffed by highly skilled bureaucrats, but generated no positive export impact when less-skilled officials were assigned to manage the offices.
- Who was studied
- Domestic manufacturing firms assisted by South Korea's state trade promotion agency (KOTRA) across international branch offices.
- How
- Quasi-experimental study evaluating long-term firm export growth based on bureaucrat skill allocations across foreign offices.
What to do
Assess and screen public officials for specialized managerial and commercial competencies before deploying them to lead international trade promotion offices.
From the source
"While opening a new export office in a given country usually increased Korean firms' exports for many years, thus helping the country's manufacturing firms grow, there was no positive effect when less-skilled officials were in charge."
Market Access: Connecting Firms and Entrepreneurs to Markets to Spur Business and Job Growth