Russian Industrial Restructuring: Trends in Productivity, Competitiveness and Comparative Advantage

28 Pages Posted: 17 Nov 2004

See all articles by Rudiger Ahrend

Rudiger Ahrend

Centre for Entrepreneurship, SMEs, Regions and Cities

Date Written: October 22, 2004

Abstract

This article investigates issues related to industrial restructuring in Russia. Based on extensive sectoral data it examines, more particularly, levels and changes in labour productivity, unit labour costs and revealed comparative advantages for a large number of Russian industrial sectors. The main findings are the following. First, impressive increases in labour productivity have been achieved since 1997, especially during the post-crisis period. Secondly, this has been true for all major sectors, with the exception of those which are still predominantly state controlled or which suffer from strong state interference. Thirdly, there have been significant relative adjustments within the industrial sector, as labour productivity increased more in less productive sectors. Since the crisis, relative unit labour costs have also adjusted considerably, as less competitive sectors experienced relatively slower wage growth and larger labour force reductions. Fourthly, international competitiveness - as measured by revealed comparative advantage - remains limited to a small number of sectors that mainly produce primary commodities (particularly hydrocarbons) and energy intensive basic goods. And, finally, there has been a tendency for further specialisation in resource based exports in recent years.

Keywords: Russia, transition, industry, sector, productivity, competitiveness, revealed comparative advantage, RCA, restructuring, unit labour costs, wages, private sector, state control

JEL Classification: L1, O52, P2, P31

Suggested Citation

Ahrend, Rudiger, Russian Industrial Restructuring: Trends in Productivity, Competitiveness and Comparative Advantage (October 22, 2004). Available at SSRN: https://ssrn.com/abstract=619183 or http://dx.doi.org/10.2139/ssrn.619183

Rudiger Ahrend (Contact Author)

Centre for Entrepreneurship, SMEs, Regions and Cities ( email )

2 rue Andre Pascal
Paris, 75016
France
75016 (Fax)

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