IBS Lunchtime Research Seminar - Industrial Policy under Constraints: Evidence from Pakistan's Export Subsidy Schemes

You are cordially invited to attend an International Business and Strategy Departmental Research Meeting, during which there will be a presentation by Dr Stefania Lovo, University of Reading. A reminder that attendance for IBS (full time, research oriented) staff and full-time students is compulsory, and where possible, must be in person. Individuals unable to attend in person, due to legitimate reasons will be provided a Teams link on request. Non-IBS staff are welcome to attend, but must register prior to the event. If you have not received the email invite please email Angie Clark

Please join us in Room 108, Henley Business School, if you would like to attend, please register using the link below:

Please make sure you let me know in advance if you intend to attend in person so that the correct amount of catering is booked.

Date: Wednesday 11th November HBS Room 108

Time: 13.00 - 14.30

Abstract:

We evaluate a major export subsidy programme in Pakistan’s textile sector that applies differential rebate rates. Combining product-level event-study estimates with synthetic control evidence, we find no detectable increase in aggregate textile exports but substantial reallocations across products with different subsidy rates. Garment and made-up exports, which receive the highest rebate rates, exceed their counterfactual levels by US$626 million annually, but these gains are more than offset by a US$995 million shortfall in lower-rate processed and raw textiles, consistent with a shift toward downstream processing at home. Exporter records show changes in specialisation at exit and shifts from lower- to higher-rate products within some multi-product exporters, consistent with adjustment through participation and product mix. We derive a break-even welfare condition that makes explicit the net social benefits required to justify the policy’s financing and implementation costs.