Patterns of Russian Firms' Export Pricing

The main objective of the study is to explore the patterns in the Russian exporters' prices behavior depending on the characteristics of the importing country. Theoretical models of the heterogeneous trade theory suggest two main mechanisms for the emergence of sustainable differences in prices between different export directions - quality differences and price discrimination. The presented estimates on the Russian detailed customs statistical data for 2004-2015 indicate that Russian export prices are on average higher when goods shipped to richer, more remote countries and countries with larger markets. These regularities are driven mostly by the quality selection, to a lesser extent - by the price discrimination. Moreover, the discovered mechanisms are most pronounced in the behavior of export prices of differentiated goods. The results of the study suggest that the competitiveness of Russian firms is mostly related to product quality and improving access of the Russian firms to high-quality components can be considered as one of the possible ways to expand the presence of Russian manufacturers in the world markets.