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The Survival of Latvian Products and Firms in Export Markets

Konstantins Benkovskis, Peter Jarrett, Ze'ev Krill, Olegs Tkacevs and Naomitsu Yashiro
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Peter Jarrett: OECD
Ze'ev Krill: OECD
Naomitsu Yashiro: OECD

No 2022/02, Working Papers from Latvijas Banka

Abstract: 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 associted 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 (search for similar items in EconPapers)
JEL-codes: F10 F14 H81 P45 (search for similar items in EconPapers)
Date: 2022-04-25
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (1)

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