Firm‐level trade effects of WTO accession: Evidence from Russia

Abstract

AbstractThis paper examines the impact of Russia’s World Trade Organization (WTO) accession on international trade patterns at the firm level. A large literature of cross‐country studies examines the long‐run trade effects of the General Agreement on Tariffs and Trade (GATT)/WTO membership. Our paper contributes to this literature by bringing short‐run micro‐level evidence from the experience of a large trading country. Using customs data on the monthly import and export transactions of Russian firms over the period 2011–2015, we investigate the short‐run responses of firm‐level trade along the intensive and extensive margins following Russia’s WTO accession in 2012. Our results indicate an increase in the number of foreign countries that Russian firms export to or import from, and a significant increase in the number of exported products. The evidence on the effects of the WTO accession on the intensive margin of firm‐level trade is mixed. Additionally, we find suggestive evidence that the Russian retaliatory food embargo imposed in response to the Crimean economic sanctions might have been intended as a protectionist policy to help out a vulnerable domestic industry (i.e. agriculture) directly impacted by the country’s WTO accession.