<p>Increased exports have the potential to spur economic growth and reduce poverty in sub-Saharan Africa. While existing literature extensively examines trade creation and the introduction of new export products, many developing countries still face the challenge of short-lived export spells. Increasing the lifespan of existing exports is a cost-effective and viable way to maintain export contribution to economic growth, especially for countries with institutional challenges. We investigate the determinants of export survival, with a specific focus on the role of agglomeration in destination markets. Using Malawi as a case study, we analyse export data from 117 trading partners over 20 years (2003-2022) employing a shared frailty survival model with a Weibull proportional hazard distribution. Our findings indicate that agglomeration significantly enhances the survival of Malawi’s exports, with spatial concentration of economic activities in importing countries reducing the hazard of export failure by approximately 4.5 percentage points. This effect remains robust across different trading partner samples and is particularly pronounced in Sub-Saharan African destinations. The findings reveal substantial heterogeneity in export survival across destinations and product types, highlighting the importance of strategic market targeting. These findings provide evidence for policy formulation in countries pursuing export-oriented growth amid institutional constraints.</p>

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Agglomeration and Export Survival amid Institutional Challenges: Evidence from Malawi using a Shared-Frailty Survival Analysis

  • Tadala Banda,
  • Farai Chigaru

摘要

Increased exports have the potential to spur economic growth and reduce poverty in sub-Saharan Africa. While existing literature extensively examines trade creation and the introduction of new export products, many developing countries still face the challenge of short-lived export spells. Increasing the lifespan of existing exports is a cost-effective and viable way to maintain export contribution to economic growth, especially for countries with institutional challenges. We investigate the determinants of export survival, with a specific focus on the role of agglomeration in destination markets. Using Malawi as a case study, we analyse export data from 117 trading partners over 20 years (2003-2022) employing a shared frailty survival model with a Weibull proportional hazard distribution. Our findings indicate that agglomeration significantly enhances the survival of Malawi’s exports, with spatial concentration of economic activities in importing countries reducing the hazard of export failure by approximately 4.5 percentage points. This effect remains robust across different trading partner samples and is particularly pronounced in Sub-Saharan African destinations. The findings reveal substantial heterogeneity in export survival across destinations and product types, highlighting the importance of strategic market targeting. These findings provide evidence for policy formulation in countries pursuing export-oriented growth amid institutional constraints.