The use of public support on internationalization activities: evidence from a Heckman selection model

Abstract

An interesting debate is currently taking place among scholars and decision makers about the evaluation of public support targeted to internationalization activities. In order to understand their efficiency, we need first to know more about the determinants of their use. We developed an econometric model based on the Heckmam method, a two-step statistical approach that corrects for selection bias resulting from non-randomly selected sample of firms' awarenesses. The model is tested on a recent survey that includes 441 firms that used at least one of the 11 internationalization support measures launched in Portugal since 1994. The empirical results overall show that firm competencies and the requirements of internationalization positively affect the awareness of public support. Analysing the effects on use, we found evidence that firm competencies are negatively related with use, unlike the the requirements of internationalization, which are positively related with the use of public support.