Assessing the Sustainability of Regional Foreign Trade Complex (the Case of Germany’s Industrial Region – North Rhine-Westphalia)

Abstract

Until last year, the growth of the German economy was largely based on the use of Russian energy resources. At the same time, Western sanctions have severely restricted foreign trade with the Russian Federation. Th is paper analyzes the sustainability and adaptation potential of foreign trade in North Rhine-Westphalia as one of the most industrialized regions of Germany using vector autoregression model. Th e results of the study show that the key factors aff ecting the foreign trade activity of North Rhine-Westphalia are manufacturing shipments and fi xed capital investment as well as labour force for the import variable. Th e modelling results reveal that this region was highly dependent on Russian energy resources, and a complete refusal to import them could lead to long-term economic consequences.