Duration of Export Relationships of Philippine MSMEs

Abstract

Within the framework of the Asia-Pacific Economic Cooperation (APEC) Boracay Action Agenda and the ASEAN Strategic Action Plan developed by its members to assist MSMEs to reach internationalization, the study examines the survivability of Philippines MSMEs' exports to select countries. The analysis is based on the survival analysis model of Besedeš and Prusa (2006a; 2006b) and Besedeš and Prusa (2008). Using the Kaplan Meier estimator model in both the exports coming from MSME and the total trade data, the study documented the survival rate of goods and duration of Philippine exported goods. The research shows that most export relationships of the Philippines are brief, contrary to conventional trade theories which suggest that most trade relationships will be long-lived. Also, the study finds that MSMEs, on average, account for a more significant number of export relations than large establishments. Furthermore, among the MSMEs, it is the medium-sized firms that constitute the majority of export relations over different durations.