provides information on how services’ value added is distributed among economic activities and how services linkages relate to trade over time.

The GTAP database represents the most comprehensive, convenient, and internationally‐comparable source of sector‐specific data across countries. Of the 129 regions in GTAP v.8, 112 represent individual countries and 17 represent composite regions. In the case of individual countries, the social accounting matrix (SAM) for each country relies on the most recent input‐output data available from national sources for each country (see Aguilar and Walmsley, 2012). These are harmonized to a standard 57‐ sector format for ease of comparison. Limitations of the GTAP data include infrequency of updates (the most recent GTAP 9 pre‐release takes the data only to 2011) and the fact that some input‐output data may be adjusted to provide consistency with merchandise trade and macroeconomic data also used in the SAM. Therefore, results should be interpreted cautiously and should be seen as a first attempt to understand trade performance in developing countries.

(2) For the Trade in Services database, the World Bank merged and reconciled all available sources of data from the OECD, Eurostat, the United Nations, and the International Monetary Fund (IMF) to create a database on bilateral services trade. By mirroring flows, it provides a best available estimate of bilateral flows and their evolution in recent years for 200 countries. Data are reported in US$,<sup>3</sup> millions for 1981–2009. This database makes it possible to carry out a wide range of sophisticated assessments, such as estimating gravity models, measuring of the trade potential of country, trade diversification, and other analytical techniques.

(3) Finally, the report uses firm‐level data for eight aggregated regions in Russia and at the much disaggregated regional level. The data come from the RUSLANA database, which contains balance sheet information on companies in Russia, such as stock data and exports revenue. Although RUSLANA distinguishes between domestic and exporting firms, trade flows are not covered, so the regional analysis relies on the number of exporters and their revenue as the best proxy for the export activities of Russian firms. These data are also the basis for exploration of the countrywide distribution of foreign direct investment (FDI) in Russia, the majority of which goes into services. Data on FDI revenues refer to 2012; however, firms covered are those that exported to any country in the world at least once between 2009 and 2013.

Assessing the competitiveness of Russian services begins with evaluating their role in the domestic economy, which is discussed in the first section. An important preliminary assessment consists in cross‐ country comparison of basic indicators, such as the share of a country’s value added from services exports and its importance in relation to the domestic economy. Russia’s performance is compared with that of Brazil, China, India, and South Africa, the other BRICS (Brazil, Russia, China, India, and South Africa) countries. The second section assesses ability to be competitive in the two functions of services trade—as a source of (a) export diversification and (b) greater competitiveness within the Russian economy. The third section examines how much value‐added services and other exports contribute to the economy. Section 4 analyzes firm‐ and region‐level services trade, following in section 5 by a diagnostic of determinants of services performance, identifying factors that facilitate and constrain their competitiveness, linking performance and determining factors, and suggesting policy options to address specific constraints. The final section draws conclusions.

> 3 All monetary amounts are US$ unless otherwise indicated.

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