Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2011:13: Exploring the Evolution of Trade Survival Since 1962

Wolfgang Hess () and Maria Persson ()
Additional contact information
Wolfgang Hess: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Maria Persson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: Aiming to explore how the survival of trade flows has evolved over time, we analyze a rich data set of detailed imports to individual EU15 countries from 140 non-EU exporters, covering the period 1962-2006. We find that short duration is a persistent characteristic of trade throughout the extended time period that we study: in general only 40 percent of trade flows survive the first year of service, and this share has not changed much since the 1960s. However, this observed constancy is the result of two underlying trends that work in opposite directions. On the one hand, positive trends in several of the observed explanatory variables -- which in turn influence the hazard of trade flows dying in a negative direction -- imply that the hazard tends to decrease over calendar time. On the other hand, there is also a positive trend in the hazard due to calendar year-specific unobserved factors. Holding all observed determinants constant, the probability of a trade flow dying in its first year increases from 34% at the beginning of the period to 90% at the end.

Keywords: Duration of Trade; Survival; Entry and Exit; European Union; Discrete-Time Hazard Models

JEL-codes: C41; F10; F14

17 pages, April 18, 2011

Full text files

WP11_13.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to David Edgerton ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-02-06 14:12:33.