Analysis of Interregional Trade Flows of the Russian Federation Using the Gravity Equation

Trade is a fundamental branch of the Russian economy. The study of interregional trade flows makes it possible to identify the main areas of trade, problems and opportunities for the development of regions. A large number of studies on international trade flows can be found in the modern literature, however, this scientific field contains a limited number of studies based on interregional trade, despite the special interest in its specifics due to the absence of many unaccounted-for factors such as the amount of customs duties, differences in currency and language. The first chapter of the study provides an overview of works on the topic of studying trade flows using a gravitational model. Various specifications are considered: the first models with a minimum set of variables, as well as models with the addition of various dummy variables. In the second chapter, the specifics of Russia's interregional trade are specified and the variables used to build an econometric model are described. In the third chapter of the study, regressions with a different set of variables were constructed and evaluated, appropriate tests were conducted, the desired dependence of trade volume on various factors was revealed, the interpretation of the results obtained based on a model with the best fit quality was given and a forecast for the first 150 observations was presented. The econometric analysis is based on data on 81 regions of Russia for 2021, obtained mainly from the archive of the EAESD and Rosstat. As an addition to the work, a cluster analysis was carried out, which made it possible to identify groups of regions united in accordance with a territorial feature according to the principle of division by federal districts. This study may be useful for officials responsible for trade policy and future work involving the analysis of trade flows using a gravity model.