Exporters’ agglomeration and the survival of export flows: empirical evidence from Colombia

Abstract

The survival of new exports is key for underpinning the dynamics of exports growth. In this paper, we explore whether agglomeration of exporters enhance duration of export flows at the firm-product-destination level using transaction level data for the universe of exports in Colombia between 2005 and 2011. We find that both the presence and size of agglomerations increase the survival rate of trade flows, defined by the triple firm-product-destination. This agglomeration effects seems to be related with flow specific spillovers and are highly concentrated across space. The effects tend to be stronger as firms perform similar product-destination export activities. Also the effects are larger for differentiated products where uncertainty about demand is more prevalent.