One-and-a-Half Centuries of Russo-Japanese Trade Relations: How to Overcome “Path Dependance”?

Abstract

For more that 150 years trade between Japan and Russia was strongly influenced by political dynamics, individual shares of bilateral trade were extremely low, and Japan mostly supplied manufactured goods in exchange for Russian raw materials. These characteristics of Japan-Russia trade restricted the options for further economic development, and thus can be considered as an example of path dependence. The study argues that the initial years of the 2010s have brought significant changes to the traditional model of trade. Namely, market forces have appeared as the primary driver of trade, and Japan’s investment in the Russian energy sector and participation in automotive manufacturing have provided the capital and technology for high value-added production in Russia.