Is Russia competitive on international markets? Bilateral trade elasticities for Russia.
R.Bardazzi – L.Ghezzi
UNIFI • •IRPET
Main-idea: Is Russia competitive on international markets? Why and in what sectors? Which are the most important competitors in Russia as a destination market?
Summary: The aim of our work is to show the position of Russia in international trade both as exporter and as destination market. We analyse this issue with a Bilateral Trade Model which includes the estimation of trade share equation for 66 groups of commodities.
We find that in exporting to Russia, determinants of competitiveness are different both by sector and by country: for instance, in the car industry, for Germany the main competitive factor is commodity price while for Japan also capital innovation and quality matter. On the other hand, when Russia exports oil to different markets estimated trade elasticities are influenced by the relative shares on the respective markets, as comparing the case of Italy and China.
The bottom line of the presentation is that both price and capital innovation are relevant factors on the trade shares of Russia in international markets although the role of these variables is commodity-specific.
For reference: R.Bardazzi, L.Ghezzi. Bilateral trade elasticities for Russia An Inforum-type analysis. 5 September 2019. Russia, Sochi, 27th Inforum Conference, URL: https:// ecfor.ru/publication/bilateral-trade-elasticities-for-russia/
This presentation happened 5 September 2019, Russia, Sochi at 27th Inforum Conference.
The conference & materials: https://ecfor.ru/27th-inforum-world-conference/
Playlist with the other videos from the conference: https://www.youtube.com/playlist?list=PLJBJFs8UgQgpmWWFzqw87jdwOBQXQmLfu
Inforum’s site: http://www.inforum.umd.edu/
Inforum, or Interindustry Forecasting at the University of Maryland, was founded nearly 50 years ago by Dr. Clopper Almon, now Professor Emeritus of the University. It is dedicated to improving business planning, government policy analysis, and the general understanding of the economic environment.
The host side was the Institute of Economic Forecasting of the Russian Academy of Sciences. IEF RAS specializes in fundamental, applied and exploratory scientific research in the field of analysis and forecasting of the socio-economic prospects of Russia and its regions, and the development of recommendations and proposals with a goal to improve the quality of economic policy in Russia. The site is https://ecfor.ru.
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Notes:
Main features of Inforum-BTM:
• Bilateral trade flows
• Sector disaggregation of flows
• Endogenous sectoral competitiveness
• Econometrically estimated equations
• Tool for long-term forecasting and macro-policies evaluation
• Global coverage of world trade
We use the bilateral trade model in order to:
• describe the bilateral external relationships of Russia
• estimate price and non-price elasticities of competitors on the Russian market
• estimate competitiveness of the Russian products in the Chinese and italian oil markets
BardazziR., L.Ghezzi(2018), “A Multi-Scale System of Macroeconometric Models: the Inforum Approach”, Studies on Russian Economic Development, 29
Final remarks:
•it’ s important to take into account both price elasticities and capital elasticities if you want to explain changes in market shares
• The magnitude of elasticities, in absolute terms, is relatively higher using a sectoral disaggregation analysis than we use aggregate data
• The level of heterogeneity is very high between sectors and among destination market. For this reason I think that it could be a big mistake to use some kind of aggregate equation for export in your country model
