Empirical Analysis of Competitiveness Factors of Russian Exportersin Manufacturing Industries

The article examines the relationship between import of semi-finished products and export of final goods of Russian manufacturing firms. The key question is whether the import of components and semi-finished products affects the competitiveness of the final product. We argue that the competitiveness of exporters largely depends on endogenous factors and, in particular, on imports of semi-finished products, components and means of production, and thus consider only exporting firms instead of the total population of manufacturing firms. We employ the data from the RuFIGE project for manufacturing firms in Russia in 2014. The empirical estimation uses probit regression. Empirical results show that import of advanced components increases the quality of produced goods, which, in turn, determines higher competitiveness of a firm on foreign markets: a higher share of imported components and semi-finished goods is related to a higher share of export revenue and a higher probability of a given firm being an exporter of advanced goods. We also find that a higher share of imported means of production (within the total investments in means of production) increases firm production capabilities and this, in turn, determines higher export revenue. The results have an important consequence for Russian economic policy and indicate that the introduction of protectionist measures on import of foreign components and semi-finished goods should occur, first, gradually, to allow companies to adapt to the new conditions, and second, selectively, in order not to block the access of Russian exporters to critical components and means of production that have no Russian analogues.