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Import Dependence and Import Substitution in Russian Manufacturing: A Business Viewpoint

Author

Listed:
  • Yury Simachev

    () (Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics, Russia)

  • Mikhail Kuzyk

    () (Interdepartmental Analytical Center (Russia); Institute of Applied Economic Research of the Russian Presidential Academy of National Economy and Public Administration (Russia))

  • Nikolay Zudin

    () (Center for Strategic Research (Russia); Interdepartmental Analytical Center (Russia))

Abstract

The aim of this study is to evaluate the import dependence of Russian industrial firms as well as analyze the ‘switch’ to using Russian products and technologies in the context of their availability and firms’ interest in them. The main information source for the study was a survey of company executives conducted in September-October 2015. The obtained results suggest that in quantitative terms the import consumption levels for the manufacturing industries in Russia are relatively small, especially compared with the corresponding levels of Western Europe countries. At the same time, about two thirds of the surveyed companies are significantly dependent on imports, primarily imports of machinery and equipment. The main reason for the use of imports is the absence of Russian analogues. If they are present, there are problems with the low quality of those Russian analogues and the fact that they are not in line with the client’s technological requirements. In general a higher level of import dependence is typical for high-tech and successful companies, which means that these companies are the most vulnerable to any import restrictions. Current import dependency level does not satisfy many companies which forces them to try to reduce this dependency: mostly it takes the form of switching to national suppliers, slightly less often – import diversification. The Russian import substitution policy is associated with an attempt revive, modernize or create the missing production elements in the national economy, i.e. it is essentially vertical. However, in the absence of close work with the horizontal measures, such as the development of certain critical technologies, the formation of new areas of knowledge and filling previously missing science competences, such a policy is characterized by a ‘limited shelf life’, constant lag, with a focus primarily on the price competitiveness. All this generates an expansion of an economy that is highly sensitive to currency fluctuations. A proactive import substitution policy linked to new emerging markets is needed.

Suggested Citation

  • Yury Simachev & Mikhail Kuzyk & Nikolay Zudin, 2016. "Import Dependence and Import Substitution in Russian Manufacturing: A Business Viewpoint," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 10(4), pages 25-45.
  • Handle: RePEc:hig:fsight:v:10:y:2016:i:4:p:25-45
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    References listed on IDEAS

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    1. repec:hig:fsight:v:11:y:2017:i:4:p:84-95 is not listed on IDEAS
    2. repec:ers:journl:v:special_issue:y:2018:i:1:p:287-295 is not listed on IDEAS

    More about this item

    Keywords

    import of products; technologies; and services; import dependence; import substitution; Russian industry; technological level of production; firms’ behavior;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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