Does Incentive Improve Export Performance of Firms? An Evidence

Abstract

Trade is an engine of growth, and favourable international trade is essential to attain internal and external stability. In recent times, many developing countries, including Nigeria, have chosen the path of export incentives as the means of achieving a favourable international trade balance. The paradigm shift is a pointer that globalization has made international trade very competitive and firms in less developed countries are at the receiving end. The present study examined the effect of export incentives on the export performance of Nigerian firms. Data were collected through a survey of 60 firms that benefited from export expansion grants (EEG). The Fixed Effect method was adopted in the study. The result shows that the export performance of the firms improved significantly with the export expansion grant. It then suggests that if the country implements all its incentive programmes, the country's external trade will improve significantly.