Survival of the Fittest: Export Duration and Failure in U.S. Fresh Fruit and Vegetable Markets

Recent contributions to the theoretical and empirical trade literature emphasize the channels by which exporting occurs and the duration and survival rates of trade relationships. However, for agricultural trade, few studies have considered the factors affecting export survival. This article identifies factors affecting the duration of fresh fruit and vegetable exports to the U.S. market, including U.S. sanitary and phytosanitary (SPS) policy regulations. The main findings can be summarized as follows. First, our preferred model with exporter binary variables indicates that changes in U.S. commodity prices and exporter gross domestic product have the largest impact, whereas U.S. production variability and exporter experience have the lowest impacts on the hazard rate of export duration. Second, SPS treatment requirements have persistent impacts on trade duration. Water treatment requirements quadruple the average hazard rate in the first year of a spell of service, and while the hazard rate does diminish over time, it is still nearly three times the average hazard rate, even after the fourth year of the spell of service. Similarly, a combination treatment of fumigation and cold treatment/refrigeration more than triples the average hazard rate in the first year of the spell of service, but this effect diminishes more quickly over time.