What determines export survival to the US market? An analysis of the impact of product quality and sophistication

Viola Lamani () and Pauline Lectard ()
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Viola Lamani: Univ Paul Valéry Montpellier 3, Univ Montpellier, Univ Perpignan, CNRS, CIRAD, ART Dev UMR 5281
Pauline Lectard: ART-Dev, Univ Montpellier, CIRAD, CNRS, Univ Paul Valéry Montpellier 3, Univ Perpignan Via Domitia

Economics Bulletin, 2024, vol. 44, issue 3, 790 - 803

Abstract: Using product-level data at the six-digit level of the HS classification, we examine the impact of product characteristics, namely quality and sophistication on the survival of exports to the United States over the period 1995-2017. Unlike previous studies, we derive econometrically a measure of product quality based on Khandelwal, Schott and Wei (2013)'s approach and show that exporting higher quality goods decreases the probability of failure. We also find that exporting highly sophisticated products decreases the probability of leaving the US market. However, if the level of sophistication is abnormally high compared to that of the exporter's average export basket, the negative effect of product sophistication on the probability of failure is reduced. The robustness checks confirm our findings.

Keywords: survival analysis; product quality; product complexity index (search for similar items in EconPapers)
JEL-codes: C4 F1 (search for similar items in EconPapers)
Date: 2024-09-30
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