Russian Federation: How Services Contribute to Competitiveness

74 Pages Posted: 7 Oct 2016

See all articles by Sebastian Saez

Sebastian Saez

World Bank

Erik van der Marel

European Centre for International Political Economy (ECIPE)

Date Written: September 19, 2016

Abstract

Globalization is creating many new trade and growth opportunities, with services trade increasingly becoming an issue for export-oriented economies. Services are important to country trade strategies, because they represent activities in which countries may have a comparative advantage, and they are drivers of competitiveness for the whole economy. This paper uses data from the World Development Indicators, two new databases (the Export in Value-Added database from the Global Trade Analysis Project, and Trade in Services data), and firm-level data. The paper employs a wide range of indicators to analyze the trade competitiveness of the services sector in the Russian Federation. Since service exports are less than would be expected considering Russia's level of development, the study finds that the contribution of services to export diversification could be heightened significantly. The scale of Russian business services exports is relatively low, although exports of traditional services, like transport and travel, are performing well. Despite the relatively minor importance of exports of modern services, the category of other business services has in recent years been growing fast, and business services have strengthened their revealed comparative advantages. Yet Russia still has much potential for expanding trade in modern services. There is also potential to diversify services exports to other markets, such as France, Germany, Japan, and elsewhere in Asia, which today seems underexploited. Finally, although exports of direct services are low, services such as transport, distribution, finance, and other business services are making major contributions to other exports, in particular energy.

Keywords: Trade and Services, Trade Technology and Productivity

Suggested Citation

Saez, Sebastian and Marel, Erik van der, Russian Federation: How Services Contribute to Competitiveness (September 19, 2016). World Bank Policy Research Working Paper No. 7827. Available at SSRN: https://ssrn.com/abstract=2849128

Sebastian Saez (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Erik van der Marel

European Centre for International Political Economy (ECIPE) ( email )

Rue Belliard 4-6
Brussels, 1040
Belgium

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