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Market Integration in Russia During the Transformation Years

Author

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  • Gluschenko, Konstantin

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

Abstract

A cross-sectional relationship between price dispersion among Russian regions and per capita income dispersion is used to measure the degree of integration between regional commodity markets. The sequence of cross-sectional estimations for each month of the period spanning 1992 through 2000 provides the temporal pattern of market integration in Russia, yielding an integration trajectory. This pattern suggests that the regional fragmentation of the national market had been increasing during the early years of transition, and then (since about the end of 1994) integration was tending – in general – to improve. However, substantial fluctuations occur in the movement to more integration. Difficult-to-access regions markedly contribute to the overall disconnectedness of regional markets; controlling for these regions, the pattern becomes more encouraging. Surprisingly, the European part of Russia turns out to be less integrated than its Asian part. A number of culprits behind market fragmentation are found, organized crime among them.

Suggested Citation

  • Gluschenko, Konstantin, 2002. "Market Integration in Russia During the Transformation Years," Economics Series 116, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihsesp:116
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    File URL: https://irihs.ihs.ac.at/id/eprint/1438
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    References listed on IDEAS

    as
    1. Konstantin Gluschenko, 2004. "Analysing changes in market integration through a cross-sectional test for the law of one price," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 135-149.
    2. Berkowitz, Daniel & DeJong, David N., 1999. "Russia's internal border," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 633-649, September.
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    6. David C. Parsley & Shang-Jin Wei, 1996. "Convergence to the Law of One Price Without Trade Barriers or Currency Fluctuations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1211-1236.
    7. Mr. Vincent Koen & Mr. Steven T Phillips, 1992. "Price Liberalization in Russia: The Early Record," IMF Working Papers 1992/092, International Monetary Fund.
    8. Konstantin Gluschenko, 2003. "Market integration in Russia during the transformation years," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(3), pages 411-434, September.
    9. Глущенко К.П., 2001. "Пространственное Поведение Уровней Цен," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 37(3), июль.
    10. 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.
    11. Bruce L. Gardner & Karen M. Brooks, 1994. "Food Prices and Market Integration in Russia: 1992–93," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 641-646.
    12. Berkowitz, Daniel & DeJong, David N. & Husted, Steven, 1998. "Quantifying Price Liberalization in Russia," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 735-760, December.
    13. Ms. Paula De Masi & Mr. Vincent Koen, 1997. "Prices in the Transition: Ten Stylized Facts," IMF Working Papers 1997/158, International Monetary Fund.
    14. Barry K. Goodwin & Thomas J. Grennes & Christine McCurdy, 1999. "Spatial price dynamics and integration in russian food markets," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 3(2), pages 157-193.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Market integration; Law of one price; Price dispersion; Russian regions.;
    All these keywords.

    JEL classification:

    • P22 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Prices
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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