Russia’s common market takes shape: Price convergence and market integration among Russian regions

Konstantin Gluschenko ()

No 7/2006, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition

Abstract: This paper analyzes the spatial structure of goods market integration in Russia, characterizing regions into three states: (a) integrated, (b) not integrated but trending toward integration, and (c) not integrated and not trending toward integration. Using time series of the cost of a staples basket across 75 regions of Russia for 1994-2000, I exploit a nonlinear cointegration relationship with an asymptotically subsiding trend to capture movement toward integration. The analysis suggests that 36% of Russian regions were integrated with the national market over 1994-2000, 44% were in the process of integrating with the national market, and 20% of regions were not integrated and not trending toward integration.

Keywords: market integration; law of one price; price dispersion; convergence; Russian regions (search for similar items in EconPapers)
JEL-codes: C32 P22 R10 R15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-geo and nep-tra
Date: 2006-06-22
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