Finnish Re-exports to Russia
We study re-exports from Finland to Russia. Re-exported goods are defined as goods that are imported by a purchaser in one country who then exports the product to a third country without processing. Re-exports are a major driver behind recent growth of Finnish exports to Russia, with re-exports constituting over a quarter of Finnish exports to Russia in 2005. Re-exporting typically involves high-value products such as electronics and vehicles. Finland's involvement in such trade reflects the technically advanced nature of Finnish logistics and traditionally large transit streams through Finland to Russia. Other reasons for re-exports include Russia's vast market potential for Finnish trading companies, Finnish companies' special knowledge about Russian demand (asymmetric information), transfer pricing and grey schemes. The domestic income and employment effects of re-exports are similar to those of transit trade. Re-exports are highly cyclical, making long-term developments hard to predict.