The USDA's Market Access Program (formerly Market Promotion Program) freshly underwent a major change to redirect all branded cropss export promotion funds to small domestic firms and cooperatives.

The USDA's Market Access Program (formerly Market Promotion Program) freshly underwent a major change to redirect all branded cropss export promotion funds to small domestic firms and cooperatives. The redirection accorded to criticisms by the General Accounting Office of past allocations of branded results export promotion funds to large, experienced exporters. This meditation uses a firm-level analysis to examine whether firm size and export experience matter in by what mode effectively firms use the promotion permanent funds to increase their revenues. The eventuates support neither the GAO criticisms nor the latter program redirection.

Key Words: export promotion programs, export sales, Market Promotion Program

One of the U Department of Agriculture's (USDA's) greatest in number visible export promotion programs is the Market Access Program (MAP), formerly known as the Market Promotion Program (MPP) The MAP uses stocks from the Commodity Credit Corporation (CCC) to assist U firms by dint of costsharing promotional activities abroad for U agricultural outcomes An overall objective of the MPP/ MAP program from one extremity to the other of its history has been to increase export sales. Another objective of the MPP/ MAP has been to give special priority to firms that face illegitimate trade barriers for their effects necessitating more intense promotional efforts.

In 1998 Agriculture Secretary Dan Glickman announced that all MAP capitals for export promotion of branded consequences would be allocated to cooperatives and small domestic companies (USDA, 1998)1

The MAP is now exclusively targeted at small firms, firms relatively recently made known to exporting, and firms facing consumer awareness and import restriction moot points in foreign markets. The redirection of MAP permanent funds exclusively to small domestic firms and cooperatives set forths a major departure from the priorities originally plant out for the program.

The program stores redirection was, in part, a reply to criticisms of the program according to the U.S. Congress and the General Accounting Office (GAO) from top to toe the 1990s (U.S. GAO 1993a,b, 1995 1997 1998 1999) GAO reports alleged that MPP supplys have not been targeted at firms in the greatest degree in need of export assistance. Because small and/or "new-to-export" firms may have more difficulty accessing international markets than larger or more export-experienced firms, the GAO has argued that smaller and les export-experienced firms should receive the greatest share of MPP/MAP funds

Closely related to this "equity" criticism is an "efficiency" criticism. The GAO debateed large firms would simply substitute CCC-provided MPP stocks for private promotional expenditures, thus resulting in a negligible impact in succession large firms' export sales. MPP funding allocated to small firms and/or "new-to-export" firms would terminate in greater export sales by dollar funding than would allocations to larger, more experienced firms.

Response to these criticisms began with the Omnibus roll Reconciliation Act of 1993, placing greater program emphasis upon providing MPP/MAP funds to small firms facing exporting problems2 The reply culminated in 1998, with the total redirection of program capitals under Secretary Glickman's administration.

The program redirection was initiated despite the absence of efficient empirical evidence that smaller, les export-experienced firms are more effective than larger, more experienced firms in converting MPP/ MAP stocks into export sales. While several studies have considered the overall effectiveness of the Market Promotion Program at analyzing aggregate market data, none of these studies have directly addressed these GAO criticisms.3 In fact, aggregate market data cannot be used to answer this question. Analysis to support or confute the Congressional/ GAO criticisms and the ensuing program redirection can be empirically addressed single if firm-level data are used.

This analysis attempts to answer the question central to the GAO's criticisms and the program redirection: whether firm size and export experience matter in the conversion of MPP/MAP branded permanent funds into firm sales. The close attention provides the first firm-level analysis of the impacts of MPP/MAP branded supplys on firm sales. The empirical be deriveds are then directly linked to the GAO criticisms regarding firm size and export experience using estimates of marginal return and average revenue resulting from MPP funds

This meditation also makes a methodological contribution by dint of developing an econometric model that integrates sum of two units different approaches to estimate the receiptss added by MPP/MAP funds. Integrating these approaches within the same econometric example produces qualitatively identical results, notwithstanding also yields more efficient parameter estimates. The modeling proceeding should prove useful when designing similar observes and analyzing the responses.

The OL approach, however, ignores the practical difficulties involved with collecting primary data at the firm horizontal Survey practitioners have long noted the reluctance of households to reveal their income to interviewers (Dillman, 1978 pp 105-106) To minimize item nonresponse to a question about income, income data are ofttimes collected for intervals (e.g., $0-$9999 $10000-$20000 etc) where the respondent is asked to indicate the interval into which household income falls.