around. The size of labor force (working age population) is significantly correlated with exports, and this correlation can have several possible explanations: First, labor supply is larger in more populous counties pushing wages down and increasing profitability and exports. Second, exports might be concentrated in relatively labor intensive products requiring more workers than other sectors. Third, migration might increase the number of workers in more productive counties, which are also larger exporters. We cannot test which scenario is correct, and it is also possible that all are correct at the same time, but we can conclude that there is a positive correlation between the size of labor force and exports.

Per capita GDP is positively correlated with exports, which is expected because both exports and GDP per capita are highly correlated with productivity. Moreover, we find that the coefficient of motorway density is larger than the coefficient of the road density, therefore the density of motorways shows a stronger correlation with exports. The most surprising finding is the positive correlation between low skill labor ratio and exports. Normally, exporting firms demand relatively more skilled workers compared to non-exporting firms. The correlation between exporting firms and skilled labor demand is a robust finding in the literature. Among others Verhoogen (2008), Matsuyama (2007), and Brambilla et al (2012) report this phenomenon. However, we find that in this case exports are positively correlated with low skill labor ratio (and thus negatively correlated with high skilled labor ratio). This correlation may not be pervasive and may be driven by low skill intensive manufacturing and commodity exports. For example, Zagreb has the smallest low skill labor ratio but it is also the largest exporter. Moreover, although the literature generally points to a different kind of dynamic between skill levels and exports than the one identified by this analysis, previous studies of firm-level data for Croatia suggest some potential explanations for the current findings. Specifically, as Stojcic (2012) highlights in a recent evaluation of the competitiveness of Croatian manufacturing exporters, it is apparent that local companies still rely on low labor costs in order to maintain a successful international performance. This is due to the fact the largest share of exports originating from the country is composed of low-technology products, which are likely to require primarily low-skill labor inputs.

Finally, the number of entrepreneurs per capita seems to be negatively correlated with exports (although not statistically significant). This finding might sound surprising at first, but it is perfectly consistent with the findings of recent trade literature. Researchers, flowing Metliz (2003), showed that there is a positive correlation between the productivity, size and export volume of firms. After trade liberalization, smaller firms exit the market, and their market shares are usually captured with larger firms. Therefore, it is unsurprising to see a negative correlation with the number of firms and the volume of exports, since trade volume is strongly associated with larger firms.

The correlation between the number of export destinations and county characteristic is presented in Table 14. The explanatory variables are identical to the ones that are reported in Table 12. Again, similar to Table 12, most of the coefficients are positive and statistically 14