Working Paper

Disintegration

Abstract: We study the effects of trade barriers and the persistence of past linkages on trade flows in the former Soviet Union (FSU). Estimating gravity equations on 1987-1996 trade among and between nine Russian regions and fourteen FSU republics, we find that Russian regions traded 60 percent more with each other than with republics in the reform period (1994-96). In contrast, they did not trade significantly more with each other than with republics in the pre-reform period (1987-90). Estimating a richer model, we find that trade barriers are primarily responsible for the current domestic bias. However, the existing infrastructure stock has significantly limited the recent reorientation in trade. Finally, we find evidence of anticipatory adjustment during the transition to independence.

Keywords: International trade;

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: International Finance Discussion Papers

Publication Date: 1998

Number: 618