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Russia’s common market takes shape: Price convergence and market integration among Russian regions

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  • Gluschenko, Konstantin

    ()
    (Institute of Economics and Industrial Engineering, Siberian Branch of the Russian)

Abstract

This paper analyzes the spatial structure of goods market integration in Russia, characterizing regions into three states: (a) integrated, (b) not integrated but trending toward integration, and (c) not integrated and not trending toward integration. Using time series of the cost of a staples basket across 75 regions of Russia for 1994-2000, I exploit a nonlinear cointegration relationship with an asymptotically subsiding trend to capture movement toward integration. The analysis suggests that 36% of Russian regions were integrated with the national market over 1994-2000, 44% were in the process of integrating with the national market, and 20% of regions were not integrated and not trending toward integration.

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File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/dp0706.pdf
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Bibliographic Info

Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 7/2006.

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Length: 36 pages
Date of creation: 22 Jun 2006
Date of revision:
Publication status: Published as Gluschenko, Konstantin, 'Price convergence and market integration in Russia' in Regional Science and Urban Economics, 2011, pages 160-172.
Handle: RePEc:hhs:bofitp:2006_007

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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
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Web page: http://www.suomenpankki.fi/bofit_en/
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Related research

Keywords: market integration; law of one price; price dispersion; convergence; Russian regions;

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References

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  8. Daniel Berkowitz & David N. DeJong, 2001. "The evolution of market integration in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(1), pages 87-104, March.
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  12. Gluschenko, Konstantin, 2004. "Nonlinearly testing for a unit root in the presence of a break in the mean," MPRA Paper 678, University Library of Munich, Germany, revised Sep 2005.
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  15. Newey, Whitney K & West, Kenneth D, 1994. "Automatic Lag Selection in Covariance Matrix Estimation," Review of Economic Studies, Wiley Blackwell, vol. 61(4), pages 631-53, October.
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  17. Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," Working Papers 98-01-012, Santa Fe Institute.
  18. Gluschenko, Konstantin, 2006. "Russia’s common market takes shape: Price convergence and market integration among Russian regions," BOFIT Discussion Papers 7/2006, Bank of Finland, Institute for Economies in Transition.
  19. Andrei Shleifer & Daniel Treisman, 2003. "A Normal Country," NBER Working Papers 10057, National Bureau of Economic Research, Inc.
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  25. Glushchenko Konstantin, 2002. "Common Russian Market: Myth rather than Reality," EERC Working Paper Series 01-11e, EERC Research Network, Russia and CIS.
  26. Cushman, David O. & MacDonald, Ronald & Samborsky, Mark, 2001. "The law of one price for transitional Ukraine," Economics Letters, Elsevier, vol. 73(2), pages 251-256, November.
  27. Gluschenko, Konstantin, 2011. "Price convergence and market integration in Russia," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 160-172, March.
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Citations

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Cited by:
  1. Konstantin Gluschenko, 2010. "Price convergence and market integration in Russia," William Davidson Institute Working Papers Series wp999, William Davidson Institute at the University of Michigan.
  2. Gluschenko, Konstantin, 2010. "The Law of One Price in the Russian Economic Space," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 17(1), pages 3-19.
  3. Gluschenko, Konstantin, 2009. "Методы Анализа Межрегионального Неравенства По Доходам И Их Приложение К России
    [Methodologies of analyzing inter-regional incom
    ," MPRA Paper 18443, University Library of Munich, Germany.
  4. Konstantin Gluschenko, 2006. "Price Linkages of Russian Regional Markets," William Davidson Institute Working Papers Series wp839, William Davidson Institute at the University of Michigan.
  5. Konstantin Gluschenko, 2008. "Goods Market Integration in Russia during the Economic Upturn," William Davidson Institute Working Papers Series wp921, William Davidson Institute at the University of Michigan.
  6. World Bank, 2011. "Russia : Reshaping Economic Geography," World Bank Other Operational Studies 13052, The World Bank.
  7. Ritola, Maria, 2008. "Price convergence and geographic dimension of market integration: Evidence from China," BOFIT Discussion Papers 13/2008, Bank of Finland, Institute for Economies in Transition.

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