Commodity flow model for an exclave region: Rent-seeking in the "transitional period" of the special economic zone

Abstract

This article focuses on a commodity flow model for an exclave region (CFMER). The CFMER development is aimed at identifying aggregate proportions of the exclave's economy in the transitional period of the special economic zone (SEZ) functioning. The key method of analysis is the comparison of data on the generation of gross regional product and regional foreign economic activities (including export and import of goods and moving goods from/into the Kaliningrad region to other Russian regions). It results in a conceptual CFMER, which is assessed as of 2011. The availability of additional -as compared to a regular region- data on commodity flows in the framework of the SEZ transitional period makes it possible to identify structural disproportions in the economy. It is shown that the introduction of the SEZ transitional period did not result in a change in the conceptual model of the regional economy's functioning merely increasing the opportunities for rent extraction. The authors predict structural imbalances in the exclave economy at the microlevel, in particular, the article analyses the conceptual model of rent extraction in the SEZ transitional period. The CFMER can be used for forecasting the development of exclave's economy under different scenarios of the evolution of SEZ in the Kaliningrad region.