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Trade Specialisation Dynamics in Russia

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Abstract

This paper considers trade specialisation in Russia, examining changes in trade patterns at the sectoral level over the transition period. Trade based on inter-industry specialisation and intra-industry trade (IIT) are empirically distinguished using the Aquino and Grubel–Lloyd (GL) indices. The Aquino index is applied to measure the degree of inter-industry specialisation by sector, while the GL index is used to establish the level of IIT between industries. The empirical results support recent trade theory, which predicts an increasing level of IIT with liberalisation processes. They also suggest how inter- and intra-industry trade coexist. The econometric estimation of the factor content of Russia's exports (specialisation in resource-intensive products) supports the index analysis.

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Notes

  1. One way of correcting such downward bias towards IIT is to assess the values of exports and imports if trade was balanced and calculate the index with these new values. A weighted average of the values of the new index gives the corrected summary measure of the proportion of IIT in i's total trade (Aquino, 1981).

  2. Specifically, the electrical power industry, fuel industry, oil extracting, oil refining, natural gas, coal, ferrous metallurgy, non-ferrous metallurgy, chemical and petrochemical industry, machine building, building materials industry, pulp and paper industry, light industry and the food industry.

  3. To compute the GL index Comtrade data have been used.

  4. The FDI inflows for Brazil were 32,779 millions US$ in 2000, 33,457 in 2001 and 16,566 in 2002; for Mexico were 15,484 millions US$ in 2000, 25,334 in 2001 and 13,627 in 2002; for Poland 9,341 millions US$ in 2000, 5,713 in 2001 and 4,119 in 2002; for the Czech Republic 4,984 millions US$ in 2000, 5,639 in 2001 and 9,319 in 2002; for Russia 2,714 millions US$ in 2000, 2,469 in 2001 and 2,421 in 2002 (UNCTAD, 2003). The only exceptions are Hungary and Slovakia that show smaller FDI values than Russia (UNCTAD, 2003), but higher GNP per capita (World Development Report, 2006).

  5. Greenaway et al. (1994) chose a range of ±15% for the UK. We increase this range to ±25% because Russia is so vast. We expect that greater transport costs account for much of the variation in export and import UVs.

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Acknowledgements

I wish to thank Professor Antonio Aquino, Oliver Carsten Füg, the Editor Jeffrey B. Miller and an anonymous referee for their useful comments. I am grateful to PD Dr Peter Wehrheim, Dr Jukka Pirttila and Gregory Moore for their valuable suggestions on an earlier version of this paper. The usual disclaimer applies.

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Authors and Affiliations

  1. Department of Economics and Statistics, University of Calabria, Cosenza, Italy

    Bernardina Algieri

  2. Zentrum für Entwicklungsforschung (ZEF Center for Development Studies), University of Bonn, Germany

    Bernardina Algieri

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Algieri, B. Trade Specialisation Dynamics in Russia. Comp Econ Stud 49, 232–258 (2007). https://doi.org/10.1057/palgrave.ces.8100199

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