Saborowski, ChristianBrenton, Paulvon Uexkull, Erik2012-03-192012-03-192009-06-01https://hdl.handle.net/10986/4148Successful 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.CC BY 3.0 IGOABSOLUTE VALUEADVERSE IMPACTSBARRIERS TO TRADEBILATERAL TRADECOMMODITIESCONTRACT ENFORCEMENTCOUNTRY MARKETSCURRENCYDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYECONOMETRIC ANALYSISECONOMIC SIZEENFORCEMENT OF CONTRACTSEXCHANGE RATEEXPECTED RETURNEXPORT DIVERSIFICATIONEXPORT DYNAMICSEXPORT GROWTHEXPORT MARKETSEXPORT PERFORMANCEEXPORT PRODUCTSEXPORT PROMOTIONEXPORT PROMOTION AGENCYEXPORT PROMOTION STRATEGIESEXPORT TAXEXPORT VALUEEXPORTERSEXPORTSFINISHED PRODUCTFIXED COSTSFOREIGN MARKETSFUTURE RESEARCHGDPGROWTH RATESIMPACT OF TRADEIMPORT DATAIMPORTSINCOMEINCOME GROUPSINCOME LEVELSINFORMATION ASYMMETRIESINSTITUTIONAL ENVIRONMENTINSURANCEINTERNATIONAL ECONOMICSINTERNATIONAL TRADELESS DEVELOPED COUNTRYLOW-INCOME COUNTRIESLOW-INCOME COUNTRYMARKET INFORMATIONMARKET SIZENEW MARKETOVERVALUATIONPERFECT INFORMATIONPREFERENTIAL TRADEPREFERENTIAL TRADE AGREEMENTPREFERENTIAL TRADE AGREEMENTSPRODUCT DIFFERENTIATIONPRODUCTION COSTSPUBLIC POLICYPURCHASINGPURCHASING POWERREGRESSION ANALYSISREPUTATIONSINGLE MARKETSUNK COSTSSUPPLIERSUPPLIERSTARIFF LINETARIFF PREFERENCESTARIFF RATETECHNICAL ASSISTANCETRADE CLASSIFICATIONTRADE COSTSTRADE DIVERSIONTRADE FLOW DATATRADE FLOWSTRADE LIBERALIZATIONTRADE PARTNERSTRADE POLICYTRADE POLICY REFORMSTRADE REFORMTRADE RELATIONSHIPTRADE RELATIONSHIPSTRADE VALUETRANSITION ECONOMIESUNEMPLOYMENTVALUE OF TRADEVOLATILITYWEAK ENFORCEMENTWEALTHWorld Bank10.1596/1813-9450-4951