Russian Federation - Export Diversification through Competition and Innovation : A Policy Agenda

Russia's exports became further dominated by petroleum and natural gas over the last decade. The sector experienced double-digit annual export growth in the last decade and represented almost 65 percent of Russia's exports value in 2009 a product of higher commodity prices and higher export volumes. Export growth rates of the non-oil and gas sector were also notable. Such industries as machinery, electronics, transportation equipment and chemicals reached a combined growth rate in export value of 10 percent in the last decade. This more positive comparison, however, hides relevant structural limitations in Russia's trade performance. Moreover, Russia's revealed comparative advantage seems concentrated in the 'periphery' of the product-space map, which may limit the potential for export diversification. This includes industries such as raw materials (26 products) and forestry (11 products) out of a total of 97 identified products. (At the center of the product-space are industries such as metallurgy, vehicles, machinery, etc, in which Russia does not show comparative advantages). Such specialization is sometimes considered problematic because the capabilities developed in those sectors are not easily redeployed to other industries, hindering the process of economic diversification. Yet, several resource-rich countries have managed to expand their comparative advantages beyond the traditional, natural resource-intensive products. Russian firms are, on average, larger than the average firm in the ECA region but too few firms export. It is a well documented fact that only a minority of firms in an economy export. Economic modernization and export diversification are priorities in the Russian economic policy agenda, with several measures being undertaken in recent years to promote growth in the non-oil and gas sectors. Yet the reason why some firms succeed in breaking into foreign markets while others do not is far from fully understood. In this note, the author tries to identify the binding constraints to export diversification in Russia. Using firm-level data, the author identify which investment climate factors are affecting Russian firm's propensity of engaging in export activities. Results show that lack of competition and entrepreneurial innovation are relevant obstacles to the emergence of new, potentially exportable products.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2011-07
Subjects:	ACCESS TARIFF, ADVERSE EFFECTS, ADVERSE IMPACT, AGRICULTURE, ALLOCATIVE EFFICIENCY, ARABLE LAND, AVERAGE PRODUCTIVITY, BANKRUPTCY, BARLEY, BEST PRACTICE, BEST-PRACTICE, BINDING CONSTRAINTS, BUDGET ALLOCATION, BUSINESS ENVIRONMENT, BUSINESS INVESTMENTS, BUSINESS SECTOR, BUSINESSES, CAPABILITIES, CAPACITY DEVELOPMENT, CARTEL, CERTIFICATE, CERTIFICATES, COLLUSION, COMMERCIAL BANKS, COMMERCIALIZATION, COMMODITIES, COMMODITY, COMMODITY PRICES, COMMUNICATIONS TECHNOLOGIES, COMPARATIVE ADVANTAGE, COMPARATIVE ADVANTAGES, COMPARATIVE ECONOMICS, COMPETITION POLICIES, COMPETITION POLICY, COMPETITIVE MARKET, COMPETITIVE MARKETS, COMPETITIVENESS, CONTESTABILITY, CORPORATE GOVERNANCE, CUSTOMS, CUSTOMS UNION, DEVELOPED COUNTRIES, DIVISION OF LABOR, DOMESTIC COMPETITION, DOMESTIC INVESTORS, DOMESTIC MARKET, DOMESTIC MARKETS, ECONOMETRIC ANALYSIS, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, ECONOMIC GEOGRAPHY, ECONOMIC GROWTH, ECONOMIC REFORM, ECONOMIC SECTORS, ELECTRICITY, EMERGING ECONOMIES, EMPIRICAL ANALYSIS, ENDOGENOUS VARIABLES, ENERGY EFFICIENCY, ENERGY PRICES, ENTERPRISE SECTOR, ENTERPRISE SURVEY, ENTERPRISE SURVEYS, EQUIPMENT, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURE, EXPENDITURES, EXPORT BASE, EXPORT GROWTH, EXPORT MARKETS, EXPORT PROMOTION, EXPORT SECTORS, EXPORTS, FINANCIAL INSTITUTIONS, FINANCIAL SECTOR, FINANCIAL SECTOR DEVELOPMENT, FINANCIAL STABILITY, FIRM GROWTH, FIRM PERFORMANCE, FIXED ASSETS, FIXED COSTS, FOREIGN FIRMS, FOREIGN INVESTORS, FOREIGN MARKETS, FOREIGN TRADE, FORESTRY, GDP, GDP PER CAPITA, GLOBAL MARKETS, GOVERNMENT INTERVENTIONS, GOVERNMENT INVOLVEMENT, GOVERNMENT REGULATIONS, GREY MARKET, GROWTH RATE, GROWTH RATES, HUMAN CAPITAL, HUMAN RESOURCES, INCORPORATED COMPANIES, INCORPORATED COMPANY, INFLATION, INFLATION RATES, INNOVATION, INNOVATION POLICIES, INNOVATION POLICY, INSPECTIONS, INTELLECTUAL PROPERTY, INTEREST RATE, INTERNATIONAL BEST PRACTICES, INTERNATIONAL COMPETITION, INTERNATIONAL COMPETITIVENESS, INTERNATIONAL MARKETS, INTERNATIONAL TRADE, INVENTORY, INVESTMENT CLIMATE, INVESTMENT VEHICLE, LABOR PRODUCTIVITY, LEGAL FRAMEWORK, LICENSES, LIMITED LIABILITY COMPANIES, LIMITED LIABILITY COMPANY, LINE OF CREDIT, LONG-TERM INVESTMENTS, MANAGERIAL SKILLS, MANUFACTURING, MARKET ACCESS, MARKET ACCESS NEGOTIATION, MARKET DISTORTIONS, MARKET DOMINANCE, MARKET ENTRY, MARKET ENTRY COSTS, MARKET FRAGMENTATION, MARKET REGULATIONS, MARKET STRUCTURE, MARKETPLACE, MENU, MIDDLE INCOME COUNTRIES, MONOPOLY, NATURAL RESOURCE, NEW MARKETS, NEW PRODUCT, NEW PRODUCTS, NEW TECHNOLOGIES, OIL, OPEN ECONOMY, OUTPUT, OUTPUTS, OUTSOURCING, OWNERSHIP RIGHTS, PATENTS, PER CAPITA INCOME, POLITICAL ECONOMY, PORTFOLIO, POWER OUTAGES, PRICE CONTROLS, PRICE INCREASES, PRIVATE SECTOR, PRIVATE SECTOR INVESTMENTS, PRIVATE SECTOR PARTICIPATION, PRIVATIZATION, PROCUREMENT, PRODUCERS, PRODUCT DEVELOPMENT, PRODUCT INNOVATION, PRODUCT MARKET, PRODUCTION FUNCTION, PRODUCTION PROCESS, PRODUCTIVITY GROWTH, QUOTAS, R&D, RED TAPE, REGULATORY ENVIRONMENT, REGULATORY FRAMEWORK, REGULATORY REQUIREMENTS, RESULT, RESULTS, RETAIL, RETAIL PRICES, RISK OF EXPROPRIATION, SALES, SHAREHOLDERS, SKILLED WORKERS, SUPPLY CHAIN, TARIFF BARRIERS, TAX, TAX BREAKS, TAX CODE, TAX LIABILITIES, TAX RATES, TAX REVENUES, TECHNOLOGY TRANSFER, TELECOMMUNICATIONS, TOTAL FACTOR PRODUCTIVITY, TOTAL SALES, TRADE OPPORTUNITIES, TRADE OUTCOMES, TRADE POLICY, TRADEMARK, TRADES, TRADING SYSTEM, TRANSFER OF OWNERSHIP, TRANSITION ECONOMIES, VARIABLE COSTS, VENTURE CAPITAL, WAGES, WAREHOUSE, WHOLESALE MARKETS, WORLD TRADE, WORLD TRADE ORGANIZATION, WTO,
Online Access:	http://documents.worldbank.org/curated/en/2011/07/16400555/russian-federation-export-diversification-through-competition-innovation-policy-agenda https://hdl.handle.net/10986/13012
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