Anatomy of Russia's Market Segmentation

Gluschenko, Konstantin

doi:10.2139/ssrn.1262180

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Anatomy of Russia's Market Segmentation

LICOS Discussion Paper No. 210/2008

26 Pages Posted: 2 Sep 2008

See all articles by Konstantin Gluschenko

Konstantin Gluschenko

Institute of Economics and Industrial Engineering, Siberian Branch of the Russian Academy of Sciences; Department of Economics, Novosibirsk State University

Date Written: 2008

Abstract

Based on a relationship between price difference and demand difference among locations, the role of various market frictions in causing segmentation of the Russian goods market is analyzed.

The spatial sample covers most of Russian regions (70 of all the 89); the data are yearly, spanning 1992 through 2000. Spatial disconnectedness of regions is found to be responsible for about 70 percent of average price differential, while the rest is caused by "artificial" impediments to market integration such as shipping conditions, regional protectionism, and organized crime.

Keywords: Market integration, law of one price, market frictions, Russian regions

JEL Classification: P22, R10, R15

Suggested Citation: Suggested Citation

Gluschenko, Konstantin, Anatomy of Russia's Market Segmentation (2008). LICOS Discussion Paper No. 210/2008, Available at SSRN: https://ssrn.com/abstract=1262180 or http://dx.doi.org/10.2139/ssrn.1262180