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Case Studies

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

06.10.2013

Ahrend, R., 'Russian Industrial Restructuring: Trends in Productivity, Competitiveness and Comparative Advantage', Post-Communist Economies, 
Vol. 18, Iss. 3 (2006)

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. Second, 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. Third, 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 larger labour force reductions. Fourth, 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.

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