What Explains the Low Survival Rate of Developing Country Export Flows?

What Explains the Low Survival Rate of Developing Country Export Flows?

Successful export growth and diversification require not only entry into new export products and markets, but also the survival and growth of export flows. This paper uses a detailed, cross-country dataset of product level bilateral export flows to...

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Bibliographic Details
Main Authors: Brenton, Paul, Saborowski, Christian, von Uexkull, Erik
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
ABSOLUTE VALUE
ADVERSE IMPACTS
BARRIERS TO TRADE
BILATERAL TRADE
COMMODITIES
CONTRACT ENFORCEMENT
COUNTRY MARKETS
CURRENCY
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
ECONOMETRIC ANALYSIS
ECONOMIC SIZE
ENFORCEMENT OF CONTRACTS
EXCHANGE RATE
EXPECTED RETURN
EXPORT DIVERSIFICATION
EXPORT DYNAMICS
EXPORT GROWTH
EXPORT MARKETS
EXPORT PERFORMANCE
EXPORT PRODUCTS
EXPORT PROMOTION
EXPORT PROMOTION AGENCY
EXPORT PROMOTION STRATEGIES
EXPORT TAX
EXPORT VALUE
EXPORTERS
EXPORTS
FINISHED PRODUCT
FIXED COSTS
FOREIGN MARKETS
FUTURE RESEARCH
GDP
GROWTH RATES
IMPACT OF TRADE
IMPORT DATA
IMPORTS
INCOME
INCOME GROUPS
INCOME LEVELS
INFORMATION ASYMMETRIES
INSTITUTIONAL ENVIRONMENT
INSURANCE
INTERNATIONAL ECONOMICS
INTERNATIONAL TRADE
LESS DEVELOPED COUNTRY
LOW-INCOME COUNTRIES
LOW-INCOME COUNTRY
MARKET INFORMATION
MARKET SIZE
NEW MARKET
OVERVALUATION
PERFECT INFORMATION
PREFERENTIAL TRADE
PREFERENTIAL TRADE AGREEMENT
PREFERENTIAL TRADE AGREEMENTS
PRODUCT DIFFERENTIATION
PRODUCTION COSTS
PUBLIC POLICY
PURCHASING
PURCHASING POWER
REGRESSION ANALYSIS
REPUTATION
SINGLE MARKET
SUNK COSTS
SUPPLIER
SUPPLIERS
TARIFF LINE
TARIFF PREFERENCES
TARIFF RATE
TECHNICAL ASSISTANCE
TRADE CLASSIFICATION
TRADE COSTS
TRADE DIVERSION
TRADE FLOW DATA
TRADE FLOWS
TRADE LIBERALIZATION
TRADE PARTNERS
TRADE POLICY
TRADE POLICY REFORMS
TRADE REFORM
TRADE RELATIONSHIP
TRADE RELATIONSHIPS
TRADE VALUE
TRANSITION ECONOMIES
UNEMPLOYMENT
VALUE OF TRADE
VOLATILITY
WEAK ENFORCEMENT
WEALTH
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090605125423
http://hdl.handle.net/10986/4148
Description
Summary:Successful export growth and diversification require not only entry into new export products and markets, but also the survival and growth of export flows. This paper uses a detailed, cross-country dataset of product level bilateral export flows to illustrate that exporting is an extremely perilous activity and especially so in low-income countries. The authors find that unobserved individual heterogeneity in product-level export flow data prevails despite controlling for a wide range of observed country and product characteristics. This questions previous studies that have used the Cox proportional hazards model to model export survival. The authors estimate a Prentice-Gloeckler model, amended with a gamma mixture distribution summarizing unobserved individual heterogeneity. The empirical results confirm the significance of a range of products as well as country-specific factors in determining the survival of export flows. From a policy perspective, an interesting finding is the importance of learning-by-doing for export survival: experience with exporting the same product to other markets or different products to the same market are found to strongly increase the chance of export survival. A better understanding of such learning effects could substantially improve the effectiveness of export promotion strategies.

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