Role of Foreign Trade in Economic Development of Russian Regions during 2000–2012
Abstract
This paper presents the results of an empirical analysis on how international trade — both export and import — could affect economic development in Russian regions. In the given study, the rate of economic development is assessed on the basis of gross regional product (GRP) per capita; period of analysis
covers 2000–2012, i. e. years of rapid growth in Russia. For the purposes of analysis the authors follow the theory of ‘new economic geography’ (NEG) developed by P. Krugman. NEG theoretical framework allows to account for the impact of geography on economic development. Th e study employs remoteness of regions from Russia’s two main foreign economic partners Germany and China as a main geographic factor, it is set to determine access to two major foreign markets, Chinese and German, for each of the Russian regions.
Remoteness. Demography is also considered as an important factor of regional economic dynamic. Panel analysis with random eff ect is based on data on 83 Russian regions published by Russian State Statistical Service is used for analysis. The results obtained allow to say that during 2000–2012 foreign trade and geography critically affected levels of GRP per capita. Th eir infl uence was positive and statistically signifi cant, which complies with the main postulates of NEG. Th e coeffi cient for the distance to Beijing has higher values than that of the coefficient for Berlin. Th us, these results imply a stronger effect of proximity to Berlin on economies of Russian regions. Also, it can be the case that higher coefficient for Beijing may reflect the structural reorientation of foreign trade flows to Asia at the regional level.
Tests for eff ect of other factors, state and private investments, on levels of GRP per capita in Russian regions were also attempted. Th ey showed that state investments generally were associated with lower levels of GRP per capita where as private investments, on the contrary, had a positive eff ect on regional levels of development during 2000–2012. Overall, analysis reveals that investment component of development has weaker explaining power than that of other factors. This result is intuitively true because low level of savings and in sufficient investment levels have become characteristic of the Russia’s development model during 2000–2012. Refs 60. Figs 2. Tables 4.
Keywords:
economic development, foreign trade, Russian regions, new economic geography
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Articles of the St Petersburg University Journal of Economic Studies are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.