Free trade agreements and export duration: Firm-level evidence for Colombia

Abstract

This paper analysis the incidence of Free Trade Agreements (FTA) on the duration of exports in Colombia. With firm-product-destination level data, duration models were estimated in discrete time that allowed identifying that the FTAs have a negative incidence on the probability of cessation of active commercial relations before the entry into force of the agreement, however, they increase the exit hazard from those that start after the agreement. This double effect is robust for different types of products and even for exports with a certificate of origin. However, incursions by firms with at least one year of experience in the export sector carry greater prospects for their duration. It is concluded that the role of the learning and knowledge acquired is key to achieve a better use of the agreements and maximize the probability of success of the incursions in the countries with FTA.