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Production subsidies have not been used by International Business literature to explain firms internationalization processes. The authors argue subsides may have a role to play in that process. Using a longitudinal database (1996-2003) at the plant level, this paper aims to shed light on the causal nexus between production-related subsidies and exports, in Portugal. They implement a propensity score matching approach in order to evaluate the effects of subsidies on both the probability of domestic firms to begin exporting and on the probability of increasing the export share of already exporters.
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