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

Author

Listed:
  • Silviano Esteve-Pérez

    (University of Valencia)

  • Vicente Pallardó-López

    (University of Valencia)

  • Francisco Requena-Silvente

    (University of Valencia)

Abstract

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.

Suggested Citation

  • Silviano Esteve-Pérez & Vicente Pallardó-López & Francisco Requena-Silvente, 2011. "The duration of firm-destination export relationships: Evidence from Spain, 1997-2006," Working Papers 1102, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:1102
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    References listed on IDEAS

    as
    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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    Keywords

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    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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