ClassiPress only has a dynamic dropdown option at the initial category selection stage, so unless you're setting up categories as countries, there isn't a function built into the theme which will allow a user to select a country and then have the next dropdown dynamically update to suit. It would require customization on your part if you were looking to implement this within the ad listing form, there is no encryption which would prevent you from making this modification.
AppThemes doesn't offer customization services, however we do have a
certified partners page where you can find developers for hire who are experienced at working with our themes. Thanks.