Chloé Le Coq

This chapter analyses the channels through which abundance in energy resources affects the manufacturing structure in Russia. It investigates the presence of Dutch disease effect across Russian regions by exploring the impact of energy resources on the growth of regional manufacturing sectors. Adopting a regional perspective allows a separation of the Dutch disease mechanism from the main alternative channel: country-wide institutional ‘resource curse’. Our results find no evidence of differential deindustrialization of those manufacturing subsectors with different sensitivity to the availability of natural resources, thereby offering no support for Dutch disease across Russian regions. This suggests that the policies aimed at limiting the negative effect of energy resources on the Russian economy should deal with the institutional environment rather than directly affect industrial structure.