Evaluating the impact of trade and investment assistance on the UK economy

This research provides new evidence on the impact of public support to help UK firms enter overseas markets and foreign firms to invest in the UK. We evaluate the impact of support provided by UK Trade & Investment on firm performance, in terms of employment, turnover, exports, productivity and survival. This study constitutes one of the most ambitious policy evaluation studies commissioned by UKTI to date, covering the participation of firms in a wide range of services from 2005 to present. This research is of high policy importance as export promotion activities may not only help firms to increase their exports but may also have other beneficial effects that may improve growth prospects.

The analysis of the impact of UKTI support includes two main tasks:

  • First, we provide an economic characterisation of firms that use UKTI services in comparison to those that never have used these services.
  • Second, we undertake a quantitative estimation of the causal effect of support on the performance of supported firms. We use appropriate econometric techniques, such as propensity score matching and difference in differences, taking account of selection effects. We look at a wide range of economic outcomes and control for a large number of variables. Information on financial indicators and firm characteristics has been drawn from the FAME database and information on patents has been provided by the IPO http://www.ipo.gov.uk/.

Timescale and funder

The project began in September 2013 and will be completed by April 2014. UK Trade & Investment (UKTI) helps UK-based exporters succeed globally and assists overseas companies to bring high quality investment to the UK. UKTI is a non-ministerial department of the Department for Business, Innovation & Skills and the Foreign & Commonwealth Office

http://www.ukti.gov.uk/