Assessment of trade intensity of the Russian Far East: Structural approach

Abstract

Based on complied statistical data, the scale of trade of the Russia’s Far Eastern regions with the local, macro-regional, domestic and foreign markets is determined. The assessment of the trade intensity in the Russia’s Far Eastern regions was carried out by comparing the results obtained within the framework of log-linear and multiplicative forms of gravity model. The estimation shows a deviation in the trade intensity of the Russia’s Far Eastern regions in favor of the national market as compared to the foreign one. Comparisons of the obtained values showed that the loglinear form, relative to the multiplicative one, significantly overestimated the impact of transportation costs on trade and the contiguity; while at the same time underestimating the values of intensity for trade interaction of Russian Far East with the domestic and foreign markets. The estimates obtained using multiplicative form, suggest a suppression of the comparative intensity of trade of the Russia’s Far Eastern regions with the macro-regional, domestic and foreign markets in dynamics, which can be explained not only by the costs of such interactions but also, by the concentration of trade relations within the Russia’s Far Eastern regions as a result of trade deviation in favor of the local markets.