Information, Perceptions and Exporting - Evidence from a Randomized Controlled Trial

We present novel evidence from the results of a randomized controlled trial on the role that information plays in the perceptions of the benefits and costs of exporting. We first present results from a baseline survey of approximately 1,000 UK manufacturing firms to show that non-exporters hold substantially more negative beliefs about the costs and benefits of exporting relative to exporters. We then explore the extent to which these differences in perceptions are due to a biased understanding of the true costs and benefits of exporting on the part of non-exporters, or are instead a reflection of underlying differences in performance characteristics across firms, the view assumed by most theories of international trade. To do this, we make targeted information available to a randomly selected subset of these firms in the form of information from the UK's export promotion agency about the benefits and costs of exporting. The results of our intervention reveal a surprising, asymmetric response on the part of exporters and non-exporters. Instead of revising their negative perceptions upward, treated non-exporters become more likely to report lower perceived benefits and higher perceived barriers compared to non-treated non-exporters. In contrast, the attitudes of existing exporters improve. We discuss different behavioral and non-behavioral explanations for this result and highlight possible implications for export promotion policies.