Agraricultural trade between Russia and European Union: gravity model approach

Ing. Stanislava Kontsevaya

Master's thesis

Abstract:

European Union is Russia’s largest agricultural trading partner and this cooperation has long history. Imposition of sanctions on certain product groups in 2014 significantly affected trading relations. A gravity model helps to understand and evaluate the characteristics of agricultural trade between countries. The aim of the research is to compare agricultural trade flow between Russia and European Union for the period of 2000-2017, find some regularity and estimate influence of Russian import ban using regression models for each European country and for particular types of agricultural products. The dataset sample consists of 12,096 observations and 29 countries. The gravity model of dependence of imports and exports from each European country to Russia takes into account such variables as the GDP (US doll), the distance (km) and the dummies (a common boarder, a common language, a common history and seaport availability).The findings of the research are following: the classical gravity model is feasible for import from Russia to EU countries. Thus, the smaller the distance between countries, the greater the trade flow between them and the larger GDP of both countries and the greater the trade flow between them. Also, the gravity model is feasible not only for countries, but also for the particular group of products. The results of the cluster analysis showed the impact of sanctions on each of 24 groups of products imported into Russia (not just those products that have been under Russian ban). It is possible to say that the impact of sanctions is deeper than previously thought.

Keywords

Russia, agriculture, trade, gravity model, commodities, territories, value, development, Russian import ban

Language used: English

Date on which the thesis was submitted / produced: 24. 11. 2019

Thesis defence

• Supervisor: prof. Ing. Luboš Smutka, Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics and Management / Economics and Management