Competitiveness analysis of Russian regions' forest industries

The ongoing crisis of the Russian economy requires some relevant actions that could relaunch economic growth. In spite of the fact that Russia possesses one fifth of the world's forests and takes the second place in terms of wood reserves, competitiveness of Russian timber industry is not appropriate relatively to its abilities. This article is aimed at a better understanding of the recent competitiveness situation of the forest industry sector in Russian regions. The concept of revealed comparative advantage is now commonly applied for competitiveness evaluation of countries. To assess the level of competitiveness of the Russian regions we applied relative trade advantage (RTA) index using the dataset of Federal Customs Service of the Russian Federation on international trade of 80 regions in 2013. In this study we used trade data consisted of 68 product types in the Harmonized Commodity Description and Coding System. Analysis is focused on three processing levels of timber commodities: raw wood, semifinished and finished wood products. However, compared with previous studies, in this paper RTA indexes have been evaluated not only for trade groups, but also for separate products. This approach allowed to perform a detailed analysis of international forest products trade of the Russian regions. It has been revealed that the quantity of products with trade advantages is diminishing while the value added is growing up. The international trade specialization of Russia is defined by the high level of resource base security and low efficiency of state forest policy in industry. The main conclusion of analysis is the classification of regions by their level of competitiveness. We grouped all the regions into four groups: leaders, top-middle regions, bottom-middle regions, outsiders. However, additional indicators show that obtained classification is not the only possible and the best illustration of this fact is second group structure. Nevertheless, in general received classification is quite appropriate. In addition, calculated indicators of competitiveness allow to provide comprehensive trade characteristics for each region. The results show that Russian foreign trade of forest products still depends on export of low-processed timber, but have the necessary potential to enter other segments of market. Information about revealed advantages and disadvantages in foreign trade can be used by policy makers for creating common strategy of investment within the branch with respect to the regional differences.

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