**Table S1.2.** Approximate Significance of Smooth Terms in Equation (3) Using Two-Year Lags for Export-Promotion Budget

||**Dependen**<br>|**t variable:**<br>||
|---|---|---|---|
||**ln (exports)**<br><br>|**ln (GDP p**<br>|**er capita)**<br>|
||**(1)**<br>**(2)**<br>**Est. DoF**<br>**p-value**|**(3)**<br>**Est. DoF**|**(4)**<br>**p-value**|
|Log of population|2.147<sup>*** </sup><br>0.001|3.948<sup>***</sup>|0.006|
|{_bf_(Budget coming from fees for services)} ln(budget)|0.000<br>0.861|0.000|1.000|
|{_bg_(Public source of funding)} ln(budget)|0.109<br>0.248|0.000|0.739|
|{_bg_(Share of private sector seats in board)} ln(budget)|0.000<br>0.461|0.000|0.731|
|{_bg_(Share of nonmatching grants)} ln(budget)|0.000<br>0.382|0.000|0.374|
|{_bg_(Agency responsibility)} ln(budget)|0.000<br>0.993|0.000|0.851|
|{_bh_(Budget spent on marketing)} ln(budget)|0.000<br>0.393|0.000|0.516|
|{_bi_(Budget spent on export support services)} ln(budget)|0.000<br>0.299|0.719<sup>** </sup>|0.043|
|{_bj_(Budget on non-exporters)} ln(budget)|0.270<br>0.213|0.000|0.357|
|{_bk_(Budget on established exporters)} ln(budget)|0.000<br>0.967|2.726<sup>*</sup>|0.074|
|{_bl_(Budget on small firms)} ln(budget)|0.000<br>0.509|0.847<sup>***</sup>|0.005|
|{_bm_(Budget on medium-size firms)} ln(budget)|0.000<br>0.356|0.000|0.934|
|{_bo_(Strategy targets exports in all sectors and destinations)} ln(budget)|0.000<br>0.502|0.000|0.770|
|_bp_(_ξ_)|0.127<br>0.276|1.000|1.000|
|Observations|199|19|9|
|Adjusted R<sup>2</sup>|0.996|0.9|96|

_Source_ : Author non-parametric estimates of equation (3). _Note_ : Standard errors in parenthesis.<sup>*</sup> p _<_ 0.1;<sup>**</sup> p _<_ 0.05;<sup>***</sup> p _<_ 0.01.

Lederman, Olarreaga, and Payton 2010 (in the case of the export equation). However, when the study lags one, two, or three years, the coefficients on export promotion budgets are all statistically insignificant.

The third robustness check the study performed involved excluding the third wave of the EPA survey for the period 2010–2014. It only concerned 14 European countries. The study therefore tested the robustness of these results to the exclusion of this third wave from the sample and found that the same variables that are statistically significant in the full sample are also statistically significant in 2005–2010 with the exception of the strategic focus on a few sectors and destinations in the export equation. Also, the share of budget spent on established exporters becomes statistically significant in the smaller sample in both the export and GDP per capita equations. The control function is also statistically significant in the 2005–2010 sample, whereas in the full sample it was not. The reason is simple. In the reduced sample the study loses almost 30 percent of all years corresponding to 31 observations. The within variation is then dramatically reduced so that even population size becomes insignificant when explaining the size of the export-promotion budget, and only the share of fees for services and the ranking of EPA responsabilities remain significant predictors (with p-values of about 4 percent, but only the latter exhibiting some prediction power). This means, that in the reduced sample, _ξ_<sup>ˆ</sup> represents a much larger share of the within-variation in the export promotion budget. Consequently, if the export-promotion budget variation is important for exports and GDP, the control function is likely to become statistically significant.

Figures S1.11 and S1.12 in this appendix corresponding to figs. 2 and 3 in the main paper report the regression plots. They suggest that there are not large differences between the results in the two samples. One could argue that the small differences (i.e., the statistical significance of the budget spent on established exporters in the 2005–2010 sample) could be due to the larger presence of developed countries in the full sample, but this would probably be overinterpreting these small differences. Note that both in the 2005–2010 sample and in the full sample the impact of an increase in the export-promotion budget