Productivity Spillovers in the Russian Federation: The Case of Chemical Market

Kuzyaeva, Anastasia and Didenko, Alexander (2014): Productivity Spillovers in the Russian Federation: The Case of Chemical Market. Published in: Review of Business and Economic Studies , Vol. 2, No. 3 (September 2014)

Abstract

Over the last decades, much attention has been drawn to the question of productivity variation across countries. The differences in cross-country productivity could be explained by both foreign and domestic innovation. In order to estimate the influence of the former, the international transfer of technology should be considered. Foreign direct investment (FDI) and international trade are suggested to be major conduits of international technology transfer. The present paper aims to extend the current empirical literature by determining the effect and the source of productivity spillover in Russia on the example of chemical industry. In order to find out the existence of FDI and international trade productivity spillover we applied the methodology developed by Ericson and Pakes (1995) and Olley and Pakes (1996). The econometric model was tested on the companies from chemical industry for the period 2007-2012. The empirical results show that FDI and international trade productivity spillovers are present in Russian chemical industry. The size of FDI spillovers is economically more important than imports-related spillovers. Based on the empirical results, we may predict that Russian accession to the World Trade Organization in 2012 should result in productivity growth. However, further research on this topic will be possible when the statistical data is available for several years after annexation.

• Item Type: MPRA Paper
• Language: English
• Keywords: FDI, chemical industry, technology transfer, productivity spillover, international trade
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L65 - Chemicals ; Rubber ; Drugs ; Biotechnology

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