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The duration of firm-destination export relationships: Evidence from Spain, 1997-2006

  • Silviano Esteve-Pérez

    (University of Valencia)

  • Vicente Pallardó-López

    (University of Valencia)

  • Francisco Requena-Silvente

    (University of Valencia)

This paper uses survival analysis to investigate the duration of Spanish firms’ trade relationships by destination over 1997-2006. Whereas firm export status is highly persistent, firms’ destination portfolio is very dynamic: a typical firm-country exporting relationship has a median duration of two years. Yet, if a firm manages to export to a country beyond two years the risk of exiting that market sharply falls afterwards. The results indicate that not only firm heterogeneity but also destination heterogeneity are crucial to explain survival in export markets. In particular, country (political) risk heavily shapes the effect of firm, product and other destination characteristics on the length of trade relationships. Whereas firm productivity, comparative advantage, partners’ GDP and proximity enhance duration of trade with low-risk countries, they have no effect on trade survival with high-risk countries. On the contrary, information spill-overs are particularly relevant to enhance survival of trade relationships with high-risk countries.

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Paper provided by Department of Applied Economics II, Universidad de Valencia in its series Working Papers with number 1102.

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Length: 34 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:eec:wpaper:1102
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  1. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
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