Trade Specialisation Dynamics in Russia
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Trade Specialisation Dynamics in Russia BERNARDINA ALGIERI1,2 1
Department of Economics and Statistics, University of Calabria, Cosenza, Italy Zentrum fu¨r Entwicklungsforschung (ZEF Center for Development Studies), University of Bonn, Germany. E-mail: [email protected]
2
This paper considers trade specialisation in Russia, examining changes in trade patterns at the sectoral level over the transition period. Trade based on interindustry 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. Comparative Economic Studies (2007) 49, 232–258. doi:10.1057/palgrave.ces.8100199
Keywords: inter-industry specialisation, intra-industry trade, Russian economy JEL Classifications: C13, F14, P27
INTRODUCTION During the 1990s, Central and Eastern European countries (CEECs) liberalised and reformed their economies. Differences in liberalisation processes, manufacturing bases, administrative reforms and political frameworks manifested themselves as differences in trade structure and comparative advantage. The body of studies assessing the evolution of trade patterns in transition economies includes a number of papers dealing with the newest EU members (Aturupane et al., 1997; Fidrmuc et al., 1999; Kaitila, 1999; Kaitila and Widgren, 2001; Traistaru et al., 2002). They also highlight the glaring absence of similar empirical research on the Russian economy. In the following discussion, we therefore give an examination of the evolution of Russian
B Algieri Trade Specialisation in Russia
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specialisation over time and identify signature characteristics of Russia’s export structure. To this purpose, we use the Aquino and the Grubel–Lloyd (GL) indices to distinguish between inter-industry specialisation and intraindustry trade (IIT) and identify the vertical (VIIT) and horizontal (HIIT) intra-industry trade components adopting a methodology based on the works of Abd-el-Rahman (1991) and Greenaway et al. (1994). A simple econometric estimation of the factor content of trade enables us to establish which components are important in explaining Russian trade flows. The rest of the paper is organised as follows: the following section illustrates the main stylised facts concerning trade specialisation. The next two sections review the main ways of measuring inter- and intra-industry trade and explicates the indices used in the empirical analysis. The penultimate section presents the empirical evidence on the patterns of trade specialisatio
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