International Trade in Goods and Services: The Case of Russia

In this paper, I evaluate Russian import of goods and services using marginal analysis. I propose the method of decomposition of export from foreign countries to Russia into extensive (number of categories of products traded) and intensive (average value per category) margins. The study’s main novelties include (i) investigation of real Russian data on trade in services, its decomposition and patterns analysis and (ii) its comparison to data on trade in goods. I also provide the comparison of the Russian trade patterns before and after the Crisis 2014-2015. I find that Russian trade increase is mostly dominated by the intensive margin; imports are higher from less developed countries; and distance factor has a positive relationship with trade in goods and no significant relationship with trade in services. The effect of economic size and income per capita is less for services compared to manufactures. Overall, the general trade patterns remained unchanged after the Crisis 2014-2015.