Social cost benefit analysis of trade missions

Michiel de Nooij*, Marcel van den Berg, Henri L.F. de Groot

*Corresponding author for this work

Research output: Chapter in Book / Report / Conference proceedingChapterAcademicpeer-review

Abstract

For small open economies economic diplomacy is an important determinant of trade intensity, foreign direct investments and economic development, but comes at non-negligible costs. It is therefore important to evaluate the social welfare effects of economic diplomacy. The authors present a social cost benefit analysis of Dutch economic missions (head of state and ministerial levels) estimating its annual net present value at over €100 million. Central in their analysis is the welfare notion that extra exports only increase welfare to the extent that exporting companies are, on average, more productive than non-exporters. The economic benefits of economic missions are more difficult to quantify than the costs. Suggested avenues for further research include the quantification of the impact of missions on exports and foreign direct investment, and the productivity premium of exporters and the learning effect, especially for new exporters that require government support.
Original languageEnglish
Title of host publicationResearch Handbook on Economic Diplomacy
Subtitle of host publicationBilateral Relations in a Context of Geopolitical Change
EditorsPeter A.G. van Bergeijk, Selwyn J.V. Moons
PublisherEdward Elgar Publishing Ltd.
Chapter14
Pages220-238
Number of pages19
ISBN (Electronic)9781784710842
ISBN (Print)9781784710835
DOIs
Publication statusPublished - 29 Jun 2018

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