The Impact of related Variety in Exporton Economic Development of russian regions

Abstract

In this paper we study the linkage between export structure and economic development in Russian regions. We conjecture that not only export variety per se , but export variety of related products, located at a small distance in the product space, significantly contributes to economic growth. Empirical analysis highlights the importance of the product space density around products with comparative advantage for economic growth in Russian regions during 2003—2008. We conclude that the presence of industry variety in a region facilitates economic development.