On the Duration of Trade

46 Pages Posted: 5 Sep 2003 Last revised: 25 Feb 2022

See all articles by Tibor Besedes

Tibor Besedes

Georgia Institute of Technology

Thomas J. Prusa

Rutgers University

Date Written: September 2003

Abstract

This paper employs survival analysis to study the duration of US imports. We find that the median duration of exporting a product to the US is very short, on the order to two to four years. Our results also indicate that there is negative duration dependence meaning that if a country is able to survive in the exporting market for the first few years it will face a very small probability of failure and will export the product for a long period of time. This result holds across countries and industries. We find that our results are not only robust to aggregation but are strengthened by aggregation. That is, as we aggregate from product level trade data to SITC industry level trade data the estimated survival increases. We rank countries by their survival experience and show that our rankings are strongly correlated with the rankings in Feenstra and Rose (2002), implying that product cycle followers also experience particularly short duration.

Suggested Citation

Besedes, Tibor and Prusa, Thomas J., On the Duration of Trade (September 2003). NBER Working Paper No. w9936, Available at SSRN: https://ssrn.com/abstract=439617

Tibor Besedes

Georgia Institute of Technology ( email )

221 Bobby Dodd Way
Atlanta, GA 30332-0615
United States

Thomas J. Prusa (Contact Author)

Rutgers University ( email )

Dept of Economics
75 Hamilton St
New Brunswick, NJ 08901
United States
848-932-8646 (Phone)
732-932-7416 (Fax)

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