Research On Development Trend And Potential Of International Intraindustry Trade In Russia

In the paper,we try to measure the extent of Russia's bilateral intra-industry trade with the main trade partners using the calculations based on the Grubel-Lloyd index,and to test empirically various country-specific hypotheses concerning the determinants of intra-industry trade between Russia and it's the main trade counteragents,using a balanced panel with 10 trade partners for the period 2014-2018.The novelty of the research is explained by application of the panel data method for analysis of Russia's intra-industry trade with the main trade partners.First of all,Russia's international intra-industry trade development is one of the priority directions of the Russian economy.Intra-industry trade is a key of efficient country's development at all and it requires special characteristics such as:factor endowments,income levels,level of development,product differentiation,foreign direct investment,etc.International intra-industry trade is an important tool for the development of the national economy,as it increases productivity,increases the total volume of production.International intra-industry trade causes a significant economic benefit from the development of specialized industries,producing a relatively higher efficiency products.Obviously,international intra-industry trade is a more intense phenomenon between countries with similar income levels,a similarity reinforced by the economic integration process and nowadays it is influenced by both external and internal factors.Among them:geographical location and the vast area of the country,which allows to develop trade and economic relations with Commonwealth of Independent States,European Union and Asian-Pacific Region as the most important trade directions;participation in trade and economic alliances such as Eurasian economic community,World Trade Organization,Asian-Pacific Economic Cooperation,etc.;a significant reserve of natural resources which causes dependence on global energy resources prices;economic and political risks,etc.Thus,in the context of Russia's integration into the world economy due to the globalization progress special actuality acquire the task of measuring the extend of Russia's international intra-industry trade with it's the main trade partners.The significance of the research due to the importance of complex study of Russia's involvement into international trade as a part of the integration into global economy at all.The purpose of this study is to examine international intra-industry trade between Russia and the main trade partners from Commonwealth of Independent States,European Union and Asian-Pacific Region,using a balanced panel with 10 trade partners for the period 2014-2018.The research questions of the study are:(1)What is the current international intra-industry trade situation in Russia?In order to answer this question,there will be provided a comprehensive analysis of international intra-industry trade in Russia.The analysis will cover:observation of Russia's export and import structure and dynamics to find out the most meaningful counteragents in Russia's external trade;measurement of Russia's international intra-industry trade calculating Grubel-Lloyd index of the particular industry to present structure and dynamics of bilateral intra-industry trade with the main trade partners;formulating the hypotheses to testify.The hypotheses are based on the correlation between intra-industry trade intensity and economic size and income level similarity,geographical closeness and participation in the economic integration group between two countries.(2)How the country-specific determinants affect international intra-industry trade between Russia and the main trade partners?It should be stressed that we are not attempting to test any specific theory of international intra-industry trade but rather ascertaining a number of determinants of intra-industry trade in manufactured commodities especially.We are specifically concerned with the influences of various country-specific factors on the intensity of Russia's IIT with its trading partners.According to the research purpose,country-specific determinants of international intra-industry trade as econometric model specifications will be found and there will be provided data analysis using STATA software to testify formulated hypotheses.Due to the presence of variables which it is impossible to observe or measure we use panel data in the current research.Methodology of the research will be presented as a linear regression analysis of the Mixed Effect Model with international intra-industry trade of the particular industry as a dependent variable,GDP and GDP per capita average differences between Russia and the trade partner as independent time-variant variables,geographical distance between Russia and particular trade partner as a time invariant independent variable and membership in Eurasian Economic Union as a dummy variable.The research work consists of abstract,conclusion,references and 4 chapters:Introduction,Analysis of Russia's international intra-industry trade,Econometric model building,Estimation results and recommendations for the future research as follows:Chapter 1 includes purpose and significance of the research background,review domestic and foreign literature,basic methods,content and structure of the work.Chapter 2 includes three sections and provides analysis for international intra-industry trade in Russia.Major areas include extent of Russia's bilateral IIT,measurements of intra-industry trade,shares of intra-industry trade in bilateral trade in 2014-2018 and summary.Chapter 3 according to the purpose of the work provides an explanation of the methodology along with the mixed effect model for Russia's bilateral intra-industry trade and empirical analysis of intra-industry trade.Major areas include the intra-industry trade determinants,related hypotheses,data and model specification and summary.Chapter 4 is organized in two main sections.The first summarizes the results of this research and presents the conclusions.The final section provides suggestions for future research.In general,this framework is quantitative in nature based on statistical analysis of trended numerical data.As the informational base,we use statistics of Russian Federal State Statistics Service,World Trade Organization(WTO),United Nations Conference on Trade and Development(UNCTAD),data of the Central Intelligence Agency(CIA),International Monetary Fund(IMF),World Bank(WB),etc.