Russian intra-industry trade: Trends in recent decades

Abstract

The article reveals the trends of Russian intra-industry trade in the period 2001–2018 with the twenty largest partners, united in three groups, namely developed economies, developing countries and CIS states. Intra-industry trade was estimated using data for export and import for each of the 6-digit Harmonized Commodity Description and Coding System product groups. The authors use the Fontanier — Freudenberg and Grubel — Lloyd indices to determine the share of horizontal, vertical and high-quality vertical IIT in agricultural products, raw materials and manufactures. It was revealed that Russia’s intra-industry trade including high-quality vertical IIT, both in terms of value and intensity is highly concentrated on the CIS countries, especially Belarus. A vertical type of intra-industry specialization dominates Russia’s intra-industry trade with all groups of countries, which generally corresponds to global trends. However, the horizontal type of specialization is most pronounced in trade with the CIS countries. It was found that most of the intra-industry exchange takes place in trade in manufactures, mainly with Belarus. The intensity of intra-industry trade in all commodity groups with both developed and developing countries remains very low and has not changed over the period under review. It is noted that during the 2010s, the intensity of all types of intra-industry trade with Belarus and Kazakhstan increased, primarily trade in industrial and agricultural goods, which is largely due to integration. The authors conclude that further integration with this group of countries contributes to the development of intra-industry specialization, export sophistication and the realization of technological advantages.