Does international trade provide incentives for efficient behaviour of Russian manufacturing firms?

Abstract

This article studies the relationship between exporting and past productivity at the firm level. Panel data from two surveys of Russian manufacturing firms conducted in 2005 and 2009 are used. We analyse the difference between continuing and new exporters, and study how drivers to exporting differ if firms export to CIS or high-wage advanced countries. We find empirical evidence for the self-selection hypothesis: both continuing and new exporters are more productive and larger than non-exporters and export quitters. Path dependence in the nature of foreign trade ceased to exist: serving the markets of the former Soviet Union requires the same productivity advantage as exporting to the developed countries.

Acknowledgement

This paper is an output of a research project implemented as part of the Basic Research Program at the National Research University Higher School of Economics (HSE).

Notes

1. Our sample includes both joint-stock companies where the state may have a stake and state enterprises in the form of federal or municipal unitary enterprises. The current regulations prevent foreign companies obtaining a stake in fully government firms, and to be fully correct we should have considered only joint-stock companies in the analysis. But to exclude fully government-owned companies would significantly reduce the number of observations. Therefore we choose the second-best option and analyse firms with all available forms of ownership.

2. Our sample may include enterprises that were established in the 1990s through restructuring or bankruptcy of older Soviet entities. We do not have information on the full history of firms and rely on the date of establishment provided by the respondent.