Export Survival in Global Value Chains
This paper focuses on the survival capacity of the trade flows in international production networks, extending the limited empirical evidence. Firstly, we emphasize that these trade relationships are longer-lived than trade in final goods. Secondly, we try to delimit the factors that explain this. Using time-discrete duration models, which control for the existence of unobservable heterogeneity, we find that variables such as initial value of the trade flow, geographic and product diversification, institutional quality, geographic and linguistic proximity and membership in a regional integration agreement play an important role for stability of global production systems. Our results highlight that the high sunk entry costs and the need for trust and reliability in global value chains are factors dissuading radical alterations in the network configuration.
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