SURVIVAL ANALYSIS OF THE EXPORTS OF LEAST DEVELOPED COUNTRIES: THE ROLE OF COMPARATIVE ADVANTAGE

Motivated by the standard Heckscher-Ohlin theory, we investigate whether comparative advantage affects the duration of exports from least developed countries (LDCs). To do so, we first calculate each exported product’s distance from the country’s comparative advantage. Then we estimate a semi-parametric Extended Cox model with time-independent/dependent explanatory variables to measure export survival rates. We find evidence that a product's distance to comparative advantage is a determinant of export survival for LDCs. Moreover, we find that the influence of comparative advantage over LDC export survival increases with time. This implies that exports of products that are close to the country’s comparative advantage are likely to be more durable. In the long run, comparative advantage can evolve dynamically. Export diversification by LDCs into non-traditional sectors calls for vigorous investment to improve the quantity and the quality of their factor endowments.