The Role of Uncertainty for Export Survival: Evidence from Estonia

Siim Rahu
2015 Social Science Research Network  
Export growth requires not only entry into new markets, but also the survival of trade flows. This paper analyses the role of initial product export share and product differentiation in Estonian manufacturing export survival. For this purpose, detailed firm-product-destination level export data is used from 1995-2011. The data show that adding and dropping new products is rife, about half of the firms change their export portfolio annually, but the average export flow duration remains modest at
more » ... two years and the median even less. The Cox proportional hazards model reveals in various settings that survival is better if the initial export share is larger and exports are more differentiated. Previous experience with foreign markets and different products has a positive impact on survival. Policies aimed at increasing knowledge about foreign markets are supporting export success. JEL Classification: F12, F14
doi:10.2139/ssrn.2607462 fatcat:qa72sigwnvepxif73rp62q4u2i