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DECTI Trade Seminar: What drives export survival? An Analysis of Export Duration in Latin America

Sponsor: Development Economics and Chief Economist (DEC)

SpeakerTibor Besedes, Georgia Institute of Technology

Abstract: Statistical techniques from survival analysis have recently been applied to explore the duration of trade relationships (Besedes and Prusa, 2006a, 2006b, 2007). Among the findings from this new literature is that trade relationships are remarkably brief. In this paper we provide evidence
confirming that export relationships are in general short-lived but that significant differences across
regions exist with Latin America exhibiting lower export survival rates than the US, the EU and East
Asia, among others. Counterfactual exercises show that raising export survival rates in Latin America
to the levels observed in other regions can produce fairly large increases in exports over the long
run. In the second part of the paper we test a battery of possible correlates of trade duration to
analyze what factors help explain the differences in survival rates. The findings point to a number of
aspects with potential policy implications for the countries in Latin America.

For Information: Yasmin D Souza

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