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Continuing rapid growth of China and India can be expected to raise incomes in Russia, but also to put adjustment pressure on Russian firms. The impacts of the rapid growth of China and India on the Russian economy are explored by examining a baseline projection using a global general equilibrium model, and then assessing the implications of higher-than-expected growth in China and India. The authors find that a major source of benefits to Russia is likely to be terms-of-trade improvements associated with higher energy prices - a quite different channel of effect from that for many developing countries that benefit primarily through expanded opportunities to trade directly with these emerging giants. Taking into account the likely improvements in the quality and variety of exports from China and India, the gains to Russia increase substantially. The expansion of the energy sector and the contraction of manufacturing and services are a sign of a Dutch disease effect that will increase the importance of policies to encourage adaptation to the changing world environment.

Adverse impacts --- Agricultural output --- Competitiveness --- Constant returns to scale --- Consumers --- Debt --- Economic cooperation --- Economic performance --- Economic Theory and Research --- Emerging Markets --- Export growth --- Exports --- Financial crisis --- Free Trade --- GDP --- Income --- Income levels --- International Economics & Trade --- International trade --- Macroeconomics and Economic Growth --- Markets and Market Access --- Natural resources --- Newly industrialized countries --- Private Sector Development --- Product differentiation --- Productivity growth --- Public Sector Development --- Taxation --- Trade Policy

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Successful export growth and diversification require not only entry into new export products and markets, but also the survival and growth of export flows. This paper uses a detailed, cross-country dataset of product level bilateral export flows to illustrate that exporting is an extremely perilous activity and especially so in low-income countries. The authors find that unobserved individual heterogeneity in product-level export flow data prevails despite controlling for a wide range of observed country and product characteristics. This questions previous studies that have used the Cox proportional hazards model to model export survival. The authors estimate a Prentice-Gloeckler model, amended with a gamma mixture distribution summarizing unobserved individual heterogeneity. The empirical results confirm the significance of a range of products as well as country-specific factors in determining the survival of export flows. From a policy perspective, an interesting finding is the importance of learning-by-doing for export survival: experience with exporting the same product to other markets or different products to the same market are found to strongly increase the chance of export survival. A better understanding of such learning effects could substantially improve the effectiveness of export promotion strategies.

Adverse impacts --- Bilateral trade --- Currencies and Exchange Rates --- Debt Markets --- Econometric analysis --- Economic size --- Economic Theory and Research --- Emerging Markets --- Export growth --- Exports --- Finance and Financial Sector Development --- Fixed costs --- Free Trade --- Income --- Income groups --- Income levels --- Inequality --- International Economics and Trade --- International trade --- Law and Justice --- Macroeconomics and Economic Growth --- Markets and Market Access --- Overvaluation --- Poverty Reduction --- Private Sector Development --- Product differentiation --- Production costs --- Purchasing power --- Tax Law --- Technical assistance --- Trade Law --- Trade Policy --- Trade policy --- Transition economies --- Unemployment --- Wealth