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This paper studies the integration of regional goods markets in Russia over the period 2001–19, analysing the law of one price. The analysis involves all pairs of country's regions, which provides a comprehensive spatial pattern of market integration. The region pairs are classified as belonging to one of four groups: perfectly integrated, conditionally integrated, not integrated but tending towards integration (converging), and neither integrated nor tending towards integration. On average, a region is found to be perfectly and conditionally integrated with 48.7% of other regions and tending towards integration with 3.3% of them. Comparisons of the European and Asian parts of Russia and other considerations suggest that geographical reasons explain the pattern obtained only partially. Apparently, idiosyncratic features of regional markets play a main role in non-integration. [ABSTRACT FROM AUTHOR]

Based on a relationship between price difference and demand difference among locations, the role of various market frictions in causing segmentation of the Russian goods market is analysed. The spatial sample covers most of Russian regions (70 of the 89); the data are annual, spanning 1992 to 2000. Spatial disconnectedness of regions is found to be responsible for about 70 percent of the average price differential, while the rest is caused by ‘artificial’ impediments to market integration such as regional protectionism, organized crime and intra-region shipping conditions. [ABSTRACT FROM AUTHOR]

This study examines price dynamics in roundwood exports from Russia to Finland, the largest international roundwood trade flow within Europe. The analysis covers six main timber assortments; sawlog and pulpwood dimensions of pine, spruce and birch. The study period, starting from the devaluation of the rouble in August 1998, was characterized by a drastic increase in the volumes of Russian roundwood imported into Finland, and a coinciding structural change in the timber assortment distribution of the Finnish roundwood imports. A basic hypothesis of economic theory, the law of one price, was tested by using quarterly time series and methods of cointegration analysis. According to the cointegration tests, the prices of Finnish and Russian spruce sawlogs have moved closely together. Furthermore, the changes in the prices of spruce sawlogs in the Finnish roundwood market are reflected in the Russian prices and not vice versa. Regarding other timber assortments, price co-movement and consequent market integration was not detected. [ABSTRACT FROM AUTHOR]

This paper presents a theoretical argument that the relationship between price differences and per capita income differences across locations can be used as a cross-sectional test for the law of one price. Since the relationship should be statistically insignificant or very weak in an integrated economy, its strength can measure the extent of goods market integration. A sequence of cross-sectional estimations for a number of points in time provides the temporal pattern of integration, so enabling changes in integration to be traced. The basic equation may be augmented by additional variables representing potential culprits behind market segmentation so as to estimate their impeding impact to integration. This methodology is empirically verified by applying it to the Russian domestic market. It is found that integration of Russia's goods market tends to improve with time; a number of culprits behind market segmentation are identified. Copyright © 2004 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]