show a marked drop in value between May and October 2007, which deviates from the general trend for the period 2005-2010. However, since these values are never zero, they could be attributed to backlogs or administrative changes at some checkpoints leading to lost data. Furthermore, since they appear to be random errors and not targeting specific firms, products or destinations, one can assume that they will be averaged out in the analysis when we aggregate data at various levels. Therefore, only the first and last year have been dropped from the analysis, and this because of their partial time and geographical coverage – 2005 has only 3 months and is presumably more susceptible to data errors as the beginning of the customs system deployment, while in 2010 some major checkpoints had not yet appeared in the data set by the time the data were obtained.

There are 17 major customs administration points across the country, each corresponding to a province (several with further sub-designations of checkpoints), and all report to the customs headquarters in Vientiane. Checkpoint coverage is consistent throughout the period at the province level, meaning that the large majority continuously report trade activity. Nevertheless, some of the sub-units have blackout periods with no reporting, but this is not systematic and can also be due to administrative changes in checkpoint designation and the centralization of reports. Therefore, we do not limit the geographical coverage in any way.

The firm names have been discarded for anonymity purposes, and the firm identification is carried out based on export license numbers. This has both advantages and disadvantages: it helps the analysis because firm names, recorded in Lao script, can have various transliterations and spellings and would make individual identification much harder. On the other hand, we lose some of the information contained in the data. Furthermore, small firms or individuals involved in small scale trade and thus lacking a license are assigned generic codes.

The main shortcoming of using the license number has to do with the identification strategy relevant for this study. In order to deduce firm-level decision-making, firm-level characteristics helping exporters, firm-level risk management strategies etc. we assume that behind the export licenses there are individual firms. This crucial assumption can be invalidated when the licenses belong to brokers, freight forwarders, import-export firms etc., entities that have little to do with the export survival behavior that is of interest here. Moreover, they can reflect other behaviors linked to a firm‟s identity that are also irrelevant for our purposes, such as mergers, divisions, changed names to avoid taxes etc.

When comparing the customs data with international trade statistics such as those collected by COMTRADE, a number of discrepancies appear. This is most striking when comparing the export destination dollar-value amounts, in particular regarding trade with China, but also the actual number of trade partners. Several possible explanations for these differences exist. Firstly, Lao PDR does not report directly to COMTRADE, and the data used for comparison is mirror data collected from the destination countries. This means that some of the information could be skewed by re-exports, and in value terms there could be significant differences between FOB and CIF values. Similarly, electric power does not appear consistently in the customs data and leads to underreporting when compared with the mirror data. Also of particular concern is the fact that a not insignificant sum of border trade goes unreported (smuggling, traditional trade, illegal logging etc.). In addition, errors in the data collection and data entry procedures can lead to _Exporting from a small landlocked economy_ _4_