## MOLDOVA – EXPORT DEVELOPMENTS AND PROSPECTS (sipea2026024)

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---

### Context
- Importance:
  - Expanding and diversifying exports is essential for sustained economic growth for Moldova as a small, open economy with a limited domestic market; trade is a key channel for technology transfer, productivity gains, and job creation.
- EU Association Agreement and DCFTA:
  - Agreement signed in 2014 and entered into force in 2016; EU imports of industrial goods were liberalized from the effective date while Moldova was granted a transition period of 3-5 years to phase out tariffs for certain products.
  - Tariffs on agricultural goods were reduced and for some sensitive products tariff rate quotas (TRQ) were applied.
  - Further reduction or elimination of customs duties is envisaged in the 2025 update of the DCFTA.
- Reform and financing:
  - Moldova’s Growth Plan is underpinned by a Reform and Growth Facility which could disburse up to €1.9 billion in concessional loans and grants for 2025-27, conditional on implementation of an ambitious Reform Agenda.
- Key constraints:
  - Infrastructure bottlenecks, limited access to finance, vulnerability to external shocks, regional uncertainties and geopolitical risks.

### Export Performance Indicators
- Aggregate and shares:
  - Exports increased by 52 percent following the DCFTA.
  - EU share of Moldova’s exports rose from 53 percent to 67 percent between 2014 and 2024.
- Main drivers and sectoral shifts:
  - Main drivers of overall export growth: transport equipment, foods, and crude materials (collectively contributed over 70 percent of overall export growth in the period).
  - Very strong gains in 2021-22 followed by declines in the last couple of years, likely due to difficulties related to the war in Ukraine.
  - Vegetables and fruit remain top export category but with diminished share; apparel and clothing shares decreased more pronouncedly; machinery and electrical equipment increased prominence.
- Openness, margins, and diversification:
  - Moldova remains open but trade openness has been on a declining trend.
  - Decomposition of export growth indicates larger role of the intensive margin, especially toward the EU (exporting more of existing products to EU markets).
  - Moldova expanded the number of export products (HS6-level) and destinations in the past decade, though 2023 shows some decline in both.
- Concentration and comparative position:
  - Product concentration increased: Top 10 products share and Herfindhal-Hirschman Index (HHI) indicate reliance on a relatively limited number of goods; product concentration tends to be somewhat higher for exports to the EU (except 2022-23 when non-EU product HHI increased).
  - Market diversification largely unchanged; share of Top 10 destinations declined relative to mid-2000s and stayed mostly flat recently.
  - Relative performance vs regional comparators: Moldova is mid-range; EU members like Romania, Bulgaria, Lithuania exhibit broader product/market bases and lower concentration, while non-EU peers (Armenia, Georgia, Belarus) show higher concentration and less diversification.

### Export Relationships Durability
- Survival analysis key statistics:
  - Median duration of country-product pair relationships for Moldova is 3 years.
  - KM curves show steep declines in survival probabilities during the first 2–3 years across almost all markets and cohorts, with attrition slowing thereafter.
  - EU vs non-EU: after three years, EU survival rate ≈ 0.6, non-EU ≈ 0.5; difference is highly statistically significant.
  - Initial export size matters: relationships that begin with larger shipment values (top quartile) survive substantially longer than small-value entries (bottom quartile).
  - Product variation: clothing and oil seeds display higher persistence; electrical equipment and apparatus, and animal or vegetable fats tend to be more short-lived.

### Export Quality
- Unit-value and destination-income metrics:
  - Moldova’s median UV position fluctuates around 0.3 versus an EU average of about 0.55.
  - UV distribution changed from bi-modal in 2014 (peaks around 20th and 80th percentiles) to 2023 where the low-UV peak became much less pronounced, suggesting fewer products in low-UV positions and compression in the middle.
  - Top UV performers are dominated by car seats and components and clothing items—manufactured goods linked to European value chains.
  - Export destinations by income:
    - about 60 percent of exports go to middle-income countries;
    - largest share to countries with per capita GDP in the $10-20K (constant 2015 US$) range;
    - increase after 2016 driven by Romania crossing the threshold;
    - expansion to markets with income less than $3K in 2022 due to higher exports to Ukraine.
- Interpretation:
  - Moldova exports some high-quality goods but aggregate export structure remains shaped by mid-range product lines.

### Export Complexity and the Product Space
- RCA and product concentration:
  - Moldova’s export basket concentrated in peripheral product-space areas; RCA predominantly in agricultural and textile sectors.
  - Number of HS4-level products with RCA fell from 128 in 2014 to 122 in 2023, driven mainly by loss of RCA in agriculture.
  - Export basket remains vulnerable to external shocks and terms-of-trade swings; limited progress in shifting to more sophisticated capabilities.
- Economic Complexity Index (ECI) and diversification prospects:
  - Moldova’s exports concentrated in low-to-mid complexity goods; products near the current mix are low-to-moderate complexity while more sophisticated products are farther away.
  - Small number of products combine low distance with high opportunity gains or high complexity—implying a relatively narrow set of “low-hanging fruit” for near-term diversification.
  - ECI declined in the mid-2010s, then gradually recovered following DCFTA entry into force; recent gains represent growth within existing low-to-mid-complexity categories rather than a move into higher complexity sectors.
  - Comparators: Bulgaria and Romania five years prior to EU membership showed greater feasibility to diversify into high-complexity products and experienced ECI increases after accession.

### Potential Effects of EU Membership (Gravity Model Evidence)
- Framework and estimation:
  - Structural gravity estimated using 3-year intervals for the 1996-2023 sample at HS2 level; three specifications estimated: (i) traditional gravity with exporter-time and importer-time fixed effects; (ii) paired fixed effects; (iii) model with heterogeneous impacts by industry.
- Selected estimated coefficients (specification labels and significance preserved):
  - RTA: 0.011 (col 1); 0.117*** (col 2); 0.112*** (col 3)
  - EU: 0.371*** (col 1); 0.148** (col 2)
  - Log (DIST): -0.790*** (col 1)
  - CONTIG: 0.283*** (col 1)
  - COMLANG: 1.294*** (col 1)
  - COMCOL: 1.320*** (col 1)
- Sector heterogeneous effects (col 3) (interaction coefficients shown; effect on sector computed as exp(β_EU + δ_g) − 1):
  - Textiles (HS50-63) #1: -0.202** (col 3)
  - Metals (HS72-83) #1: 0.205** (col 3)
  - Machinery/elect/transport (HS84-89) #1: 0.378*** (col 3)
  - Other (HS90-97) #1: 0.273*** (col 3)
- Observations and notes:
  - Observations: 706306 (col 1), 817773 (col 2 and 3)
  - Note: Standard errors in parentheses; significance: * p < 0.10, ** p < 0.05, *** p < 0.01.
- Interpretation:
  - Traditional gravity (column (1)) implies joining the EU estimated effect on exports ≈ nearly 45 percent (as reported in the text summary); paired fixed effects (column (2)) suggest a nearly 16 percent increase.
  - RTA coefficient small in traditional specification; positive and significant in paired fixed effects.
  - Benefits of EU integration vary by industry—strongest positive effects in machinery and electrical equipment; weak or negative estimated EU effects in sectors such as textiles may reflect erosion of price-based advantages as integration raises incomes and productivity.

### Conclusions and Policy Recommendations
- Summary findings:
  - DCFTA and deeper trade integration with the EU have benefited Moldova’s exports—expansion and improved durability of export relationships—yet export growth has been uneven and the export basket remains concentrated in a relatively narrow set of products.
  - Quality and complexity have improved gradually, but Moldova lags peers with more diversified and sophisticated export structures.
  - Recent gains in economic complexity reflect expansion within existing specializations rather than a shift toward advanced capabilities.
  - EU membership could amplify positive trends, especially for sectors tied to European value chains, but will not automatically overcome structural constraints.
- Priority reforms and policy actions:
  - Reducing trade costs through investments in transport corridors, border infrastructure, and logistics services to help exporters scale and diversify, particularly SMEs and firms producing time-sensitive goods.
  - Improving access to finance, including through export-oriented credit instruments, to support the survival and growth of new export relationships that currently face high early-stage attrition.
  - Upgrading skills, standards, and firm capabilities—especially in the manufacturing and agri-food sectors—to bridge capability gaps highlighted by the product space analysis and facilitate movement toward more complex products. Universities can play an essential role by providing relevant technical and analytical skills and supporting firms through research and development; this requires close corporate–academic collaboration to ensure effective transfer of knowledge and innovation.
  - Strengthening the investment climate and governance, including regulatory predictability and public administration reforms, to attract foreign direct investment which anchors higher-value export upgrading and enhances firm capabilities.
- Implementation opportunity:
  - The EU Reform and Growth Facility provides a timely opportunity to align public investment with these priorities; focused use of concessional EU resources to address infrastructure bottlenecks, expand quality infrastructure, and support firm-level upgrading can crowd in private investment and accelerate integration into European value chains.
- Outlook:
  - With sustained reform momentum, Moldova can transition from a low- to a mid-complexity export structure and achieve more resilient, export-led growth.

*Source: IMF Selected Issues Paper “MOLDOVA – EXPORT DEVELOPMENTS AND PROSPECTS” (content unit: sipea2026024).*

### References ________________________________________________________________________18

### MOLDOVA – EXPORT DEVELOPMENTS AND PROSPECTS

### A. Context
- Expanding and diversifying exports is essential for sustained economic growth for Moldova as a small, open economy with a limited domestic market; trade is a key channel for technology transfer, productivity gains, and job creation.
- Moldova’s Association Agreement with the EU (including the DCFTA) was signed in 2014 and entered into force in 2016; EU imports of industrial goods were liberalized from the effective date while Moldova was granted a transition period of 3-5 years to phase out tariffs for certain products. Tariffs on agricultural goods were reduced and for some sensitive products tariff rate quotas (TRQ) were applied. Further reduction or elimination of customs duties is envisaged in the 2025 update of the DCFTA.
- The Agreement has anchored broad economic reforms—modernization, strengthened legal and regulatory frameworks, and investments in quality and safety standards—helping firms adapt to international market requirements.
- EU membership would involve adoption of the Acquis Communautaire, participation in the single market four freedoms, and adoption of EU rules and standards; benefits could include higher foreign direct investment, faster export growth, and deeper integration in value chains.
- Moldova’s Growth Plan is underpinned by a Reform and Growth Facility which could disburse up to €1.9 billion in concessional loans and grants for 2025-27, conditional on implementation of an ambitious Reform Agenda.
- Key constraints to an export-led strategy: infrastructure bottlenecks, limited access to finance, vulnerability to external shocks, regional uncertainties and geopolitical risks.

### B. Export Performance Indicators
- Post-DCFTA export expansion:
  - Exports increased by 52 percent following the DCFTA.
  - EU share of Moldova’s exports rose from 53 percent to 67 percent between 2014 and 2024.
  - Main drivers of overall export growth: transport equipment, foods, and crude materials (collectively contributed over 70 percent of overall export growth in the period).
- Structural changes and recent trends:
  - Very strong gains in 2021-22 followed by declines in the last couple of years, likely due to difficulties related to the war in Ukraine.
  - Vegetables and fruit remain top export category but with diminished share; apparel and clothing shares decreased more pronouncedly; machinery and electrical equipment increased prominence.
  - Moldova remains open but trade openness has been on a declining trend (figures in text).
- Diversification and margins:
  - Moldova’s share in global exports has gradually risen, driven mainly by deeper integration with the EU.
  - Decomposition of export growth indicates larger role of the intensive margin, especially toward the EU (exporting more of existing products to EU markets).
  - Moldova expanded the number of export products (HS6-level) and destinations in the past decade, though 2023 shows some decline in both (possibly linked to logistical difficulties due to the war in Ukraine).
- Concentration and comparative position:
  - Product concentration increased: Top 10 products share and Herfindhal-Hirschman Index (HHI) indicate reliance on a relatively limited number of goods; product concentration tends to be somewhat higher for exports to the EU (except 2022-23 when non-EU product HHI increased).
  - Market diversification largely unchanged; share of Top 10 destinations declined relative to mid-2000s and stayed mostly flat recently.
  - Relative performance vs regional comparators: Moldova is mid-range; EU members like Romania, Bulgaria, Lithuania exhibit broader product/market bases and lower concentration, while non-EU peers (Armenia, Georgia, Belarus) show higher concentration and less diversification.

### Export Relationships Durability (subset of B)
- Survival analysis findings:
  - Median duration of country-product pair relationships for Moldova is 3 years.
  - KM curves show steep declines in survival probabilities during the first 2–3 years across almost all markets and cohorts, with attrition slowing thereafter.
  - EU vs non-EU: after three years, EU survival rate ≈ 0.6, non-EU ≈ 0.5; difference is highly statistically significant.
  - Initial export size matters: relationships that begin with larger shipment values (top quartile) survive substantially longer than small-value entries (bottom quartile).
  - Product variation: clothing and oil seeds display higher persistence; electrical equipment and apparatus, and animal or vegetable fats tend to be more short-lived.

### Export Quality
- Unit-value (UV) ladder and destination-income metrics:
  - Moldova’s median UV position fluctuates around 0.3 versus an EU average of about 0.55.
  - UV distribution changed from bi-modal in 2014 (peaks around 20th and 80th percentiles) to 2023 where the low-UV peak became much less pronounced, suggesting fewer products in low-UV positions and compression in the middle.
  - Top UV performers are dominated by car seats and components and clothing items—manufactured goods linked to European value chains.
  - Export destinations by income: about 60 percent of exports go to middle-income countries; largest share to countries with per capita GDP in the $10-20K (constant 2015 US$) range; increase after 2016 driven by Romania crossing the threshold; expansion to markets with income less than $3K in 2022 due to higher exports to Ukraine.
- Interpretation: Moldova exports some high-quality goods but aggregate export structure remains shaped by mid-range product lines.

### C. Export Complexity and the Product Space
- Product space and revealed comparative advantage (RCA):
  - Moldova’s export basket concentrated in peripheral product-space areas; RCA predominantly in agricultural and textile sectors.
  - Number of HS4-level products with RCA fell from 128 in 2014 to 122 in 2023, driven mainly by loss of RCA in agriculture.
  - Export basket remains vulnerable to external shocks and terms-of-trade swings; limited progress in shifting to more sophisticated capabilities.
- Economic Complexity Index (ECI) trends and prospects:
  - Moldova’s exports concentrated in low-to-mid complexity goods; products near the current mix are low-to-moderate complexity while more sophisticated products are farther away.
  - Small number of products combine low distance with high opportunity gains or high complexity—implying a relatively narrow set of “low-hanging fruit” for near-term diversification.
  - ECI declined in the mid-2010s, then gradually recovered following DCFTA entry into force; recent gains represent growth within existing low-to-mid-complexity categories rather than a move into higher complexity sectors.
  - Comparators: Bulgaria and Romania five years prior to EU membership showed greater feasibility to diversify into high-complexity products and experienced ECI increases after accession.

### D. Potential Effects of EU Membership (Gravity Model Evidence)
- Gravity framework:
  - Structural gravity relates bilateral trade flows to exporter production capacity, importer demand, bilateral trade costs, and multilateral resistance; models estimated using 3-year intervals for the 1996-2023 sample at HS2 level.
  - Three specifications estimated: (i) traditional gravity with exporter-time and importer-time fixed effects; (ii) paired fixed effects; (iii) model with heterogeneous impacts by industry.
- Estimated effects of EU membership and RTAs:
  - Traditional gravity (column (1)): joining the EU estimated effect on exports ≈ nearly 45 percent.
  - Paired fixed effects (column (2)): EU membership associated with a nearly 16 percent increase in exports.
  - RTA coefficient: small in the traditional specification; positive and significant in paired fixed effects specification (column (2) RTA = 0.117***).
  - Sector heterogeneous effects (column (3)): benefits of EU integration vary by industry—strongest positive effects in machinery and electrical equipment.
- Selected coefficients from table (specification labels and significance preserved as in source):
  - RTA: 0.011 (col 1); 0.117*** (col 2); 0.112*** (col 3)
  - EU: 0.371*** (col 1); 0.148** (col 2)
  - Log (DIST): -0.790*** (col 1)
  - CONTIG: 0.283*** (col 1)
  - COMLANG: 1.294*** (col 1)
  - COMCOL: 1.320*** (col 1)
  - Sector interactions (col 3) (interaction coefficients shown; effect on sector computed as exp(β_EU + δ_g) − 1):
    - Textiles (HS50-63) #1: -0.202** (col 3)
    - Metals (HS72-83) #1: 0.205** (col 3)
    - Machinery/elect/transport (HS84-89) #1: 0.378*** (col 3)
    - Other (HS90-97) #1: 0.273*** (col 3)
  - Observations: 706306 (col 1), 817773 (col 2 and 3)
  - Note: Standard errors in parentheses; significance: * p < 0.10, ** p < 0.05, *** p < 0.01.
- Interpretation:
  - Gravity estimates imply EU accession could meaningfully increase exports overall, with particularly strong effects in machinery, electrical equipment, metals, and sectors linked to European production networks.
  - Weak or negative estimated EU effects in sectors such as textiles may reflect erosion of price-based advantages as integration raises incomes and productivity.

### E. Conclusions and Policy Recommendations
- Summary findings:
  - DCFTA and deeper trade integration with the EU have benefited Moldova’s exports—expansion and improved durability of export relationships—yet export growth has been uneven and the export basket remains concentrated in a relatively narrow set of products.
  - Quality and complexity have improved gradually, but Moldova lags peers with more diversified and sophisticated export structures.
  - Recent gains in economic complexity reflect expansion within existing specializations rather than a shift toward advanced capabilities.
  - EU membership could amplify positive trends, especially for sectors tied to European value chains, but will not automatically overcome structural constraints.
- Priority reforms and policy actions (text preserved):
  - Reducing trade costs through investments in transport corridors, border infrastructure, and logistics services to help exporters scale and diversify, particularly SMEs and firms producing time-sensitive goods.
  - Improving access to finance, including through export-oriented credit instruments, to support the survival and growth of new export relationships that currently face high early-stage attrition.
  - Upgrading skills, standards, and firm capabilities—especially in the manufacturing and agri-food sectors—to bridge capability gaps highlighted by the product space analysis and facilitate movement toward more complex products. Universities can play an essential role by providing relevant technical and analytical skills and supporting firms through research and development; this requires close corporate–academic collaboration to ensure effective transfer of knowledge and innovation.
  - Strengthening the investment climate and governance, including regulatory predictability and public administration reforms, to attract foreign direct investment which anchors higher-value export upgrading and enhances firm capabilities.
- Implementation opportunity:
  - The EU Reform and Growth Facility provides a timely opportunity to align public investment with these priorities; focused use of concessional EU resources to address infrastructure bottlenecks, expand quality infrastructure, and support firm-level upgrading can crowd in private investment and accelerate integration into European value chains.
- Outlook:
  - With sustained reform momentum, Moldova can transition from a low- to a mid-complexity export structure and achieve more resilient, export-led growth.

*Source: IMF Selected Issues Paper “MOLDOVA – EXPORT DEVELOPMENTS AND PROSPECTS” (content unit: sipea2026024).*

### References

### sipea2026024 - References

### References (bibliographic list highlights)
- Anderson, J., van Wincoop, E. (2003). Gravity with Gravitas: A Solution to the Border Puzzle. American Economic Review, Vol. 93, No. 1, pp. 170-192.
- Besedeš, T., Prusa, T. (2006). Ins, Outs, and the Duration of Trade. Canadian Journal of Economics, Vol. 39, Issue 1, pp. 266-295.
- Beyer, R., Yi, C. L., Weber, S. (2025). Economic Benefits from Deep Integration. IMF Working Paper WP/25/47, Washington, DC.
- Conte, M., P. Cotterlaz, Mayer, T. (2022). The CEPII Gravity database. CEPII Working Paper N°2022-05, July 2022.
- Frankel, J., Romer, D. (1999). Does Trade Cause Growth? American Economic Review, Vol. 89, No. 3, pp. 379-399.
- Gaulier, G., Zignago, S. (2010). BACI: International Trade Database at the Product-Level. The 1994-2007 Version. CEPII Working Paper, N°2010-23.
- Growth Lab at Harvard University (2025). Growth Projections and Complexity Rankings, https://doi.org/10.7910/DVN/XTAQMC, Harvard Dataverse.
- Growth Lab at Harvard University (2024). The Atlas of Economic Complexity. Web application. Harvard Kennedy School. https://atlas.hks.harvard.edu.
- Hagemejer, J., Dąbrowski, M. (2025). Future Outlook of Moldova Trade and Investment Relations. European Parliament.
- Hagemejer, J., Mućk, J. (2019). Export-led Growth and its Determinants: Evidence from Central and Eastern European Countries. The World Economy, Vol. 42 (7), pp. 1994-2025.
- Hagemejer, J., Mućk, J. (2025). EU Enlargements, Brexit and Value Added Trade: A Structural Gravity Approach. PLoS ONE 20(4), https://doi.org/10.1371/journal.pone.0299738.
- Hausmann, R., Hidalgo, C., Bustos, S., Coscia, M., Chung, S., Jimenez, J., Simoes, A., Yildirim, M (2013). The Atlas of Economic Complexity. Cambridge, MA, MIT Press.
- Hummels, D., Klenow, P. (2005). The Variety and Quality of a Nation’s Exports. American Economic Review, Vol. 95, No.3, pp. 704-723.
- Nitsch, V. (2009). Die Another Day: Duration in German Import Trade. Review of World Economics, Vol. 145, No. 1, pp. 133-154.
- Santos Sylva, J.M.C., Tenreyro, S. (2006). The Log of Gravity. The Review of Economics and Statistics, Vo. 88, No. 4, pp. 641-658.
- UNCTAD (2018). Indicators Explained #1: Export Market Concentration Index. STAT/IE/2018/1.
- UNCTAD (2019). Indicators Explained #3: Export Product Concentration Index. STAT/IE/2019/1.
- World Bank (2016). Moldova Trade Study: Note 1. Analysis of Trade Competitiveness. World Bank Group, Washington, DC.
- World Bank (2018). From Uneven Growth to Inclusive Development: Romania’s Path to Shared Prosperity. Systematic Country Diagnostic, World Bank Group, Washington, DC.
- Yotov, Y., Piermartini, R., Monteiro, J.A., Larch, M. (2016). An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model. World Trade Organization, Geneva.

### Appendix I. Methodology and Data — Data sources and sample
- Primary data sources:
  - CEPII BACI (Gaulier, G., Zignago, 2010) — CEPII BACI annual bilateral trade flows data at the HS6 level (2007 edition) for 2007-2023 used for diversification metrics, survival analysis, and export quality indicators.
  - CEPII Gravity (Conte et al., 2022).
  - Atlas of Economic Complexity (Hausmann et al., 2013) — used for economic complexity and product space visualizations.
- Gravity model estimation:
  - CEPII BACI bilateral data covering 1996-2023, aggregated to the HS2 level.
  - Augmented with CEPII Gravity variables: DIST, CONTIG, COMLANG, COMCOL, RTA, EU.
  - Gravity model estimated on a subsample including former transition economies from Central and Eastern Europe that are currently EU members — Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia — and accession countries — Albania, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, North Macedonia, and Serbia.

### Export Concentration (normalized Herfindahl-Hirschman indices)
- Market concentration index formula:
  - 퐻퐻푖푖 = �∑푋푖푖푖푖 푋푖푖�2 푁푁푖푖=1 − �1 푁푁 1− �1 푁푁
  - where 푋푋푖푖푖푖 is the value of exports of product i by country j, 푋푋푖푖 is the world value of exports of product i, 푋푋푖푖 is total exports of country j, and N stands for the total number of exporting countries.
- Product concentration index formula:
  - 퐻퐻푖푖 = �∑푋푖푖푖푖 푋푖푖�2 푁푁푖푖=1 − �1 푁푁 1− �1 푁푁
  - where N stands for the total number of products exported.

### Extensive and Intensive Margins (Hummels and Klenow, 2005 implementation)
- Definitions used:
  - 퐸퐸퐸퐸푖푖푗푗 = ∑푋푘푗푖푖푖푖∈퐼퐼 푗푗푗푗 / ∑푋푘푗푖푖푖푖∈퐼퐼 푗푗푗푗
  - 퐼퐼퐸퐸푖푖푗푗 = ∑푋푖푗푖푖푖∈퐼퐼 푗푗푗푗 / ∑푋푘푗푖푖푖푖∈퐼퐼 푗푗푗푗
  - 푆푆푖푗 = 퐸퐸퐸퐸푖푗 × 퐼퐼퐸퐸푖푗
- Notation and scopes:
  - j denotes the country of interest (Moldova), k is a reference country, m is the importer, and i is the product.
  - Sets I and Ijm represent the sets of all export products and the products where country j has positive exports to m.
  - For this paper, exports are considered to: the rest of the world, the EU, and non-EU countries. Xkmi represents global exports in the relevant scope; Xjmi represents Moldova’s exports in the relevant scope.

### Survival Analysis (Cox and Oakes, 1984; Kleinbaum and Klein, 2012)
- Context:
  - Event: end of an export relationship.
  - Survival time: time elapsed between start and end of an export relationship.
  - Right censoring: sample may end before the event occurs.
- Survivor function:
  - S(t) = Pr(T > t)
  - The survivor function starts at 1 and decreases as t increases; estimated survivor curves are step functions.
- Kaplan-Meier (KM) estimator:
  - Ŝ(t) = ∏�1 − ℎ̃� = ∏�1 − d_j / r_j�
  - where ℎ̃(t) is the estimator of the hazard function, d_i is the number of failures (exits), and r_i is the number of surviving relationships at j.

### Gravity Model (following Yotov et al., 2016)
- General notation:
  - lnlX_iij,t is the log of exports from country i to country j at time t.
  - π_i,t, χ_i,t, and μ_iij are exporter-time, importer-time and exporter-importer fixed effects, respectively.
  - lnDIST, CONTIG, COMLANG, COMCOL denote log of distance, contiguous borders, common official language and colonial history.
  - RTA_ij,t and EU_ij,t are indicator variables for free trade agreement and EU membership at time t.
  - D_k^g is an indicator variable for aggregated sector k.
- Model (1):
  - lnl l X_iij,t = eeeee �π_i,t + χ_i,t + β1 lnDIST + β2 CONTIG + β3 COMLANG + β4 COMCOL + βRTA RTA_ij,t + βEU EU_ij,t� ε_iij,t
- Model (2):
  - lnl l X_iij,t = eeeee �π_i,t + χ_i,t + μ_iij + β_RTA RTA_ij,t + β_EU EU_ij,t� ε_iij,t
- Model (3):
  - lnl l X_iij,t = eeeee �π_i,t + χ_i,t + μ_iij + β_RTA RTA_ij,t + β_EU EU_ij,t + ∑_k γ_k D_k^g + ∑_k δ_k (D_k^g × EE_iij,t)� ε_iij,t

*REPUBLIC OF MOLDOVA — INTERNATIONAL MONETARY FUND (excerpts from "References" and "Appendix I. Methodology and Data", sipea2026024)*

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_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2026/english/sipea2026024.pdf_