Impact of Grain Export on the Russian Empire’s Industrial Development in the Late 19th and Early 20th Centuries

This paper deals with the problem of the grain export impact on Russia’s industrial development in the late 19th and early 20th century. Authors estimated VECM models to analyze how grain export affected industrial growth. It was concluded that grain export had a long-term negative impact on industry growth in Russia. There are four possible channels of influence: through consumption, through savings, through the distribution of labor and through investment. The authors considered the investment-related channel of influence and concluded that grain export had a negative long-term impact on industrial capital. Their argument stems from the fact that at the end of the 19th and beginning of the 20th century, grain exporters were predominantly small, export profits were widely dispersed among intermediaries and traders preferred to invest not in Russia but elsewhere.