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A Gravity Model of Russian Trade: The Role of Foreign Direct Investment and Socio-Cultural Similarity

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  • Iwasaki, Ichiro
  • Suganuma, Keiko

Abstract

In this paper, we estimated a gravity model of Russian trade using panel data from Russia and 23 OECD member countries. Our estimation results indicate that foreign direct investment and socio-cultural similarity are determining factors in the trade volume between Russia and these developed economies. We also found that the trade and investment activities of Russian firms differ considerably from their counterparts in developed economies.

Suggested Citation

  • Iwasaki, Ichiro & Suganuma, Keiko, 2013. "A Gravity Model of Russian Trade: The Role of Foreign Direct Investment and Socio-Cultural Similarity," RRC Working Paper Series 40, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:rrcwps:40
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/25826/RRC_WP_No40.pdf
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    2. Naohito Abe & Ichiro Iwasaki, 2010. "Organisational culture and corporate governance in Russia: a study of managerial turnover," Post-Communist Economies, Taylor & Francis Journals, vol. 22(4), pages 449-470.
    3. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
    4. Andrzej Cieślik, 2009. "Foreign direct investment and the volume of trade: the case of Poland," Economic Change and Restructuring, Springer, vol. 42(4), pages 273-291, November.
    5. Yuriy Timofeyev, 2011. "How Corruption Affects Social Expenditures: Evidence From Russia," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 5(4), pages 39-51.
    6. Boriss Siliverstovs & Dieter Schumacher, 2009. "Estimating gravity equations: to log or not to log?," Empirical Economics, Springer, vol. 36(3), pages 645-669, June.
    7. Maureen Lankhuizen & Henri L. F. de Groot & Gert‐Jan M. Linders, 2011. "The Trade‐Off between Foreign Direct Investments and Exports: The Role of Multiple Dimensions of Distance," The World Economy, Wiley Blackwell, vol. 34(8), pages 1395-1416, August.
    8. Oxana Babecká Kucharčuková & Jan Babecký & Martin Raiser, 2012. "Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Open Economies Review, Springer, vol. 23(2), pages 277-301, April.
    9. Chengang Wang & Yingqi Wei & Xiaming Liu, 2010. "Determinants of Bilateral Trade Flows in OECD Countries: Evidence from Gravity Panel Data Models," The World Economy, Wiley Blackwell, vol. 33(7), pages 894-915, July.
    10. Bogdan Lissovolik & Yaroslav Lissovolik, 2006. "Russia and the WTO: The "Gravity" of Outsider Status," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-1.
    11. Boisso, Dale & Ferrantino, Michael, 1997. "Economic Distance, Cultural Distance, and Openness in International Trade : Empirical Puzzles," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 456-484.
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    Cited by:

    1. Yugo Konno, 2016. "Evaluating Russia’s trade patterns," Post-Communist Economies, Taylor & Francis Journals, vol. 28(3), pages 300-313, July.
    2. Ichiro Iwasaki & Keiko Suganuma, 2015. "Foreign direct investment and regional economic development in Russia: an econometric assessment," Economic Change and Restructuring, Springer, vol. 48(3), pages 209-255, November.
    3. Ehsan Rasoulinezhad, 2018. "A new evidence from the effects of Russia’s WTO accession on its foreign trade," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 73-92, April.
    4. Mikalai Dudko, 2013. "Export Barriers and Stimuli in the Russian Federation," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 1(3), pages 35-56.
    5. Anna Golovko & Hasan Sahin, 2021. "Analysis of international trade integration of Eurasian countries: gravity model approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 519-548, September.

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    More about this item

    Keywords

    international trade; foreign direct investment; gravity model; Poisson regression; WTO; Russia;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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