of four years. As mentioned in the introduction, this kind of analysis has been done, traditionally, with aggregated, country level data, which are not plagued with our identification issues but at the same time lack the micro-economic support and policy relevance that firm-level data provide. This kind of disaggregated data is inherently noisier, but strong patterns should emerge through the noise, as is the case in this analysis, with high statistical significance.

In order to gain a relatively clear picture of the structure and composition of Lao exporters as well as a preliminary understanding of their survival-related mechanisms, we first looked at several descriptive characteristics of this very useful dataset. We found that multi-product, multidestination firms dominate exports in value terms and that products with a low potential for diversification tend to increase their already large presence in Lao exports.

We have also documented the great deal of exploration that goes on every year on the extensive margin (new firms, new products and new destinations) and found that this is dominated, in dollar terms, by the incumbent exports that make up the intensive margin. In terms of survival, there is a relatively high rate beyond the first year, when compared to the few countries for which we have similar data. Nevertheless, only around 10 percent of the firm-product-destination triplets last through all of the four years of our dataset. Thus, churning and realignment of product and destination portfolios within firms is happening at a very rapid pace.

The regression analysis of the factors that determine whether exporting firms survive past the first year of activity and the dollar value at which they start exporting shows that Lao firms profit from focusing on a more limited range of products and destinations. One important and rather surprising fact is that firms benefit when others do the same: the agglomeration of exporters serving the same market with the same product has a large positive impact on the odds of survival and on the initial export value. This means that there are positive spillover effects from the activities of competitors, effects similar to external economies of scale.

There is also a very strong positive impact of having experience with the product (exporting it to many countries) and a negative one for lack of focus (having too many products, serving too many markets, being active in too many sectors). In an apparent paradox, the fact of having a Revealed Comparative Advantage for that product hurts the FPD‟s survival chances. Moreover, the coefficient of market attractiveness is not statistically significant, something we interpret as a possible landlocked-effect: being stuck with a few destinations, regardless of their appeal, simply because of their proximity. This effect is noticeable in the data for other landlocked countries.

Even though little can be done by policy makers to deal with a country‟s geography besides road and air infrastructure, thereby increasing the choice of destinations for exporters, export promotion is one tool that has been used to help firms reach larger markets outside their borders. It is in this area that the paper‟s most interesting conclusions rest, and accordingly we propose two key areas of focus for export promotion policy.

Firstly, our evidence suggests that export promotion support activities should focus on helping existing exporters with a strong track record of exporting a given product to diversify into additional markets. Where resources are finite, they should be prioritized to those activities with the highest returns. Our analysis of export survival suggests that focused firms that specialize in _Exporting from a small landlocked economy_ _23_