Intensive and Extensive Margins of Export: Determinants of Economic Growth in Russian Regions under Sanctions

Economy of Regions. 2023. Vol. 19. No. 3. P. 884–897.

Fedyunina A. A., Simachev Y. V., Drapkin I. M.

This article examines the impact of intensive and extensive margins of export on economic growth in Russian regions during the period from 2015 to 2021. The study uses the export decomposition methodology to distinguish between four different measures of regional export. The hypothesis is that the introduction of new export goods and the entry into new export markets (i.e. extensive export margin) is an important factor for economic growth in Russian regions. The study finds that both intensive and extensive margins are positively related to the level of development in Russian regions, and developed regions with diversified economic structures had higher values of export margins. The empirical methodology uses panel regression with random and fixed effects. The empirical results show Russian regions’ market share in the products they export and in the countries where they export (i.e. intensive product and geographic margin) is important for the economic growth of Russian regions, while the results for extensive margin are ambiguous. The results have implications for industrial policy, which should prioritize the development of measures aimed at supporting existing exporting companies in expanding their presence in familiar markets. The task of export diversification should primarily be addressed through working with existing exporters and export products, while the export of innovative products should be viewed as a gradual evolutionary process within the framework of long-term planning.

Keywords: economic growth, российские регионы, sanctions, международные санкции, intensive margin, extensive margin, Russian regions, вклад в экономический рост

Publication based on the results of: Strategies and factors of adaptation of companies during economic shocks and disruptions in value chains in post-communist economies (2023)