The survival of Latvian products and firms in export markets

Working paper 2/2022

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Photo by: Latvijas Banka

This paper investigates factors that contribute to the survival of export relationships at the firm and product levels using a large anonymised firm-level database for Latvia. It finds that some characteristics of exporting firms, such as a higher productivity level, larger size, lower indebtedness and higher profitability are associated with longer duration of export relationships. Firms that innovated prior to exporting are also likely to enjoy longer export spells, while participation in an EU-fund support programme did not alter duration. Younger staff and management of the firm are associated with a better survival of a new export product. Furthermore, this paper reveals novel roles of export product characteristics in survival, in particular an interesting tension between the complexity of new export products and their "distance" from the existing export bundle. While aiming high, that is, exporting products that are more complex, pays off as such products are associated with longer-lasting trade relationships, aiming too high, that is exporting new products that are far more complex than the exporter's existing product bundle, tends to lower their survival probability.

Keywords: Exports, economic complexity, trade, productivity, innovation
JEL Codes: F10, F14, P45, H81

APA: Beņkovskis, K., Tkačevs, O., , J., Krill, Z., Yashiro, N. (2023, 06. dec.). The survival of Latvian products and firms in export markets. Taken from https://www.macroeconomics.lv/node/5565
MLA: Beņkovskis, Konstantīns. Tkačevs, Oļegs. , Jarret. Krill, Ze'ev. Yashiro, Naomitsu. "The survival of Latvian products and firms in export markets" www.macroeconomics.lv. Tīmeklis. 06.12.2023. <https://www.macroeconomics.lv/node/5565>.

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