Factors of Firms’ Export in Non-Energy Industries in a Resource-Rich Country: New Evidence on Russia

Abstract

Export activity is a significant challenge for firms and, simultaneously, a "marker" of their efficiency. Both of these circumstances are especially relevant for Russia, as the Russian market is quite large and at the same time is characterised by rather high barriers to entry. In such conditions, Russian firms need an especially strong motivation to enter the world market, as well as high levels of efficiency in order to compete there with the world’s leading producers. The article examines the sectoral characteristics of Russian exports, the factors influencing the export activity of firms, and the relationship of exports to labour productivity. It shows that the aggregate share of the non-energy sector in Russian exports is in a long-term downward trend. At the same time, there is a convergence of export activities of industries in the non-energy sector. The key factors of export activity of Russian firms are their large size, foreign ownership, availability of quality human capital, and R&D investment. Export is characteristic of monopolistic firms and major market players, which may be explained by the exhaustion of their growth opportunities in domestic markets, as well as by strict anti-monopoly regulation and informal obligations imposed on such firms. We find a positive relationship of labour productivity with exports and also innovations and, simultaneously, a negative relationship with the combination of both. This may indicate two alternative models of Russian firms’ competitiveness. The revealed influence of exports on labour productivity indicates the “learning-by-exporting” effect in Russian firms-exporters.

JEL: F14, F61, O12.