Determinants of Export Diversification: The Case of Russian Regions

Abstract

ABSTRACTThe hydrocarbon sector accounts for 50% of Russian exports, leading to high commodity price volatility risks for the economy. Prior literature emphasizes the role of export diversification in development and in hedging external shocks. We investigate factors affecting regional export diversification, applying method of moments quantile regression. We devise two export diversification measures, using Theil and Herfindahl indices. Our empirical findings demonstrate that innovations spur export diversification in industrial regions, while small and medium enterprises diversify exports in industrial and non-resource regions. Natural resource extraction enforces regional exports concentration. We develop policy implications for Russian regional policymakers considering the specialization of regional economies.KEYWORDS: Export diversificationnatural resourcesRussian regionssmall and medium enterprisesTheil indexJEL Classification: F14R11 AcknowledgmentsThis study was supported by the grant of the Russian Science Foundation No: 19-18-00262 ‘Empirical modelling of balanced technological and socioeconomic development in the Russian regions’Disclosure statementNo potential conflict of interest was reported by the authors.Supplementary materialSupplemental data for this article can be accessed online at https://doi.org/10.1080/00128775.2023.2265919Notes1. According to the law “On the development of small and medium-sized enterprises in the Russian Federation,” the following requirements apply to obtain the status of a small or medium-sized enterprise. An average number of employees per year: 16 to 100 employees for small enterprises and 101 to 250 employees for medium-sized enterprises. A limit applies to annual revenues: 800 million rubles for small enterprises and 2 billion rubles for medium-sized enterprises (OECD iLibrary Citation2020).2. The Commodity Nomenclature of Foreign Economic Activity (rus. TN VED) classification is based on 4-digit commodity items, identical to similar items of the international Harmonized Commodity Description and Coding System.3. Based on data availability.Additional informationFundingThis work was supported by the Russian Science Foundation [19-18-00262].Notes on contributorsRogneda VasilyevaRogneda Vasilyeva, Senior Lecturer, Department of Economics; Junior Researcher, Laboratory of Regional and International Economics, Ural Federal University, Ekaterinburg, Russia.Alina UrazbaevaAlina Urazbaeva, Kedge Business School, Marseille, France; Faculty of Economic Sciences, National Research University Higher School of Economics, Moscow, Russia.Valentin VoytenkovValentin Voytenkov, Faculty of Economic Sciences, National Research University Higher School of Economics, Moscow, Russia.