Death of Distance? Economic Implications of Infrastructure Improvement in Russia
We examine the economic implications of infrastructure investment policies that try to improve economic conditions in Russia's peripheral regions. Our analysis of firm-level industrial data for 1989 and 2004 highlights a 'death of distance' in industrial location, with increasing concentration of new firms in regions with good market access. We assess the geographic determinants of growth econometrically and identify market size and proximity to Moscow and regional infrastructure as important drivers of productivity for new and for privately-owned firms. Simulations show that the benefits of infrastructure improvements are highest in the country's capital region where economic activity is already concentrated. Policies that divert public investment towards peripheral regions run the risk of slowing down national economic growth.
| Main Authors: | , , , , |
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| Format: | Journal Article biblioteca |
| Language: | EN |
| Published: |
2008
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| Subjects: | National Government Expenditures and Related Policies: Infrastructures, Other Public Investment and Capital Stock H540, Socialist Systems and Transitional Economies: Urban, Rural, and Regional Economics P250, Regional Economic Activity: Growth, Development, and Changes R110, Other Production and Pricing Analysis R320, Public Facility Location Analysis, Public Investment and Capital Stock R530, Regional Development Policy R580, |
| Online Access: | http://hdl.handle.net/10986/5461 |
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| Summary: | We examine the economic implications of infrastructure investment policies that try to improve economic conditions in Russia's peripheral regions. Our analysis of firm-level industrial data for 1989 and 2004 highlights a 'death of distance' in industrial location, with increasing concentration of new firms in regions with good market access. We assess the geographic determinants of growth econometrically and identify market size and proximity to Moscow and regional infrastructure as important drivers of productivity for new and for privately-owned firms. Simulations show that the benefits of infrastructure improvements are highest in the country's capital region where economic activity is already concentrated. Policies that divert public investment towards peripheral regions run the risk of slowing down national economic growth. |
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