IDEAS home Printed from https://ideas.repec.org/a/aiy/jnjaer/v21y2022i4p663-684.html
   My bibliography  Save this article

Econometric Modeling of the Impact of Ethnic Diversity on Economic Diversification: Analysis of Russian Regions

Author

Listed:
  • Rogneda I. Vasilyeva
  • Ekaterina A. Rozhina

Abstract

The Russian economy is often characterized by dependence on the extraction of natural resources, which leads to high risks in the event of an unstable situation in the international market and volatility in commodity prices. Modern literature notes the significant role of economic diversification in leveling risks for the national economy, which confirms the relevance of the problem and the need to study the determinants of economic diversification. The purpose of the study is to assess the impact of the ethnic diversity of Russian regions on the diversification of the economy. At the same time, the effect of this influence is differentiated based on the results of quantile regression by separating regions with a high, medium, and low level of economic diversification. The hypothesis of the study is the assumption that the ethno-cultural heterogeneity of the regions of the Russian Federation contributes to the diversification of their economy. The regions of Russia differ to a large extent in terms of socio-economic indicators, as well as the national composition. At the same time, different ethnic groups have their own religion, language and traditions, which affects both the conduct of economic activity and the characteristics of production. For econometric modeling, panel data were used for 85 regions of Russia for the period 2000–2019. For analysis, indicators of economic diversification and ethnic diversity were calculated based on the Theil decomposition index and the ethnolinguistic fractionalization index, respectively. Taking into account the high heteroscedasticity in regional data, the method of single-stage quantile regression is used. The results of the study indicate the negative impact of the ethnic diversity index and the number of official languages on the diversification of the economy. However, the indicator of the number of major religions contributes to economic diversification. The results obtained complement the existing literature on economic diversification and ethnic diversity in the context of Russian regions, and can be used to develop public policy in the field of supporting national minorities and expanding economic diversity in Russia.

Suggested Citation

  • Rogneda I. Vasilyeva & Ekaterina A. Rozhina, 2022. "Econometric Modeling of the Impact of Ethnic Diversity on Economic Diversification: Analysis of Russian Regions," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 21(4), pages 663-684.
    • Handle: RePEc:aiy:jnjaer:v:21:y:2022:i:4:p:663-684
    DOI: http://dx.doi.org/10.15826/vestnik.2022.21.4.023
    as

    Download full text from publisher

    File URL: https://journalaer.ru//fileadmin/user_upload/site_15934/2022/02_Vasileva_Vasileva_Rozhina.pdf
    Download Restriction: no
    File URL: https://libkey.io/http://dx.doi.org/10.15826/vestnik.2022.21.4.023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    2. Christopher J. Boudreaux, 2020. "Ethnic diversity and small business venturing," Small Business Economics, Springer, vol. 54(1), pages 25-41, January.
    3. José G. Montalvo & Marta Reynal-Querol, 2005. "Ethnic Polarization, Potential Conflict, and Civil Wars," American Economic Review, American Economic Association, vol. 95(3), pages 796-816, June.
    4. Jean-Claude Berthélemy, 2005. "Commerce international et diversification économique," Revue d'économie politique, Dalloz, vol. 115(5), pages 591-611.
    5. Oguzhan Dincer & Fan Wang, 2011. "Ethnic diversity and economic growth in China," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 14(1), pages 1-10.
    6. Gören, Erkan, 2014. "How Ethnic Diversity Affects Economic Growth," World Development, Elsevier, vol. 59(C), pages 275-297.
    7. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    8. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, vol. 76(2), pages 293-323, April.
    9. Paul Collier, 2000. "Ethnicity, Politics and Economic Performance," Economics and Politics, Wiley Blackwell, vol. 12(3), pages 225-245, November.
    10. Erkan Gören, 2012. "How ethnic diversity affects economic Development?," Working Papers V-353-13, University of Oldenburg, Department of Economics, revised Oct 2012.
    11. Oguzhan Dincer & Fan Wang, 2011. "Ethnic diversity and economic growth in China," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 14(1), pages 1-10.
    12. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1203-1250.
    13. Chareyron, Sylvain & Chung, Amélie & Domingues, Patrick, 2021. "Ethnic diversity and educational success: Evidence from France," Research in Economics, Elsevier, vol. 75(2), pages 133-143.
    14. Bluedorn, John C., 2001. "Can democracy help? Growth and ethnic divisions," Economics Letters, Elsevier, vol. 70(1), pages 121-126, January.
    15. repec:zbw:hohpro:353 is not listed on IDEAS
    16. Yonatan Dinku & Dereje Regasa, 2021. "Ethnic Diversity and Local Economies," South African Journal of Economics, Economic Society of South Africa, vol. 89(3), pages 348-367, September.
    17. José Garcia Montalvo & Marta Reynal-Querol, 2004. "Ethnic polarization, potential conflict and civil wars," Economics Working Papers 770, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2005.
    18. Muhamad, Goran M. & Heshmati, Almas & Khayyat, Nabaz T., 2021. "How to reduce the degree of dependency on natural resources?," Resources Policy, Elsevier, vol. 72(C).
    19. Albassam, Bassam A., 2015. "Economic diversification in Saudi Arabia: Myth or reality?," Resources Policy, Elsevier, vol. 44(C), pages 112-117.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrés Rodríguez-Pose & Viola Berlepsch, 2019. "Does Population Diversity Matter for Economic Development in the Very Long Term? Historic Migration, Diversity and County Wealth in the US," European Journal of Population, Springer;European Association for Population Studies, vol. 35(5), pages 873-911, December.
    2. Gerring, John & Thacker, Strom C. & Lu, Yuan & Huang, Wei, 2015. "Does Diversity Impair Human Development? A Multi-Level Test of the Diversity Debit Hypothesis," World Development, Elsevier, vol. 66(C), pages 166-188.
    3. Mavridis, Dimitris, 2015. "Ethnic Diversity and Social Capital in Indonesia," World Development, Elsevier, vol. 67(C), pages 376-395.
    4. Pooja Karnane & Michael A. Quinn, 2019. "Political instability, ethnic fractionalization and economic growth," International Economics and Economic Policy, Springer, vol. 16(2), pages 435-461, April.
    5. Montalvo, Jose G. & Reynal-Querol, Marta, 2007. "Ethnic polarization and the duration of civil wars," Policy Research Working Paper Series 4192, The World Bank.
    6. Usman Khalid & Mohammad Amin, 2023. "The impact of ethnic fractionalisation on labor productivity: Does firm size matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 2213-2249, October.
    7. Aris Ananta & Evi Nurvidya Arifin & Ari Purbowati & Paul J. Carnegie, 2023. "Does diversity matter for development? New evidence of ethnic diversity’s mediation between internal migration and economic growth across Indonesia’s regions," Journal of Population Research, Springer, vol. 40(3), pages 1-21, September.
    8. Zhu, Junbing & Grigoriadis, Theocharis, 2020. "Chinese dialects, revolutionary war & economic performance," Discussion Papers 2020/7, Free University Berlin, School of Business & Economics.
    9. GOMADO, Kwamivi Mawuli, 2018. "Diversité ethnique et déforestation dans les pays en développement: identification des principaux canaux [Ethnic diversity and deforestation in developing countries: identifying the transmission ch," MPRA Paper 89380, University Library of Munich, Germany.
    10. Artjoms IVLEVS & Jaime DE MELO, 2015. "FDI, the Brain Drain and Trade: Channels and Evidence," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 21, pages 533-551, World Scientific Publishing Co. Pte. Ltd..
    11. Yamamura, Eiji, 2011. "Ethnic heterogeneity and the probability of technological disasters," MPRA Paper 31603, University Library of Munich, Germany.
    12. Habibullah, Muzafar & Haji Din, Badariah & Tan, Siow-Hooi, 2018. "Does Country with Multi-ethnic, Multi-linguistic and Multi-religious Society Induce Tourist Arrivals? Worldwide Evidence," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(1), pages 105-115.
    13. Khan, Karim, 2015. "Extractive Institutional Structure and Economic Development: Evidence from Nigeria," MPRA Paper 68559, University Library of Munich, Germany.
    14. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Centre for Economic Performance, LSE.
    15. Merima Ali & Odd-Helge Fjeldstad & Boqian Jiang & Abdulaziz B Shifa, 2019. "Colonial Legacy, State-building and the Salience of Ethnicity in Sub-Saharan Africa," The Economic Journal, Royal Economic Society, vol. 129(619), pages 1048-1081.
    16. Ann-Sofie Isaksson, 2011. "Social divisions and institutions: assessing institutional parameter variation," Public Choice, Springer, vol. 147(3), pages 331-357, June.
    17. Ozbugday, Fatih Cemil, 2019. "Kültür ve Ekonomik Başarı [Culture and Economic Success]," MPRA Paper 96734, University Library of Munich, Germany.
    18. Eiji Yamamura & Inyong Shin, 2013. "Decomposition of Ethnic Heterogeneity on Growth," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 55(1), pages 59-75, March.
    19. Giménez-Gómez, José-Manuel & Zergawu, Yitagesu-Zewdu, 2018. "The impact of social heterogeneity and commodity price shocks on civil conflicts," Journal of Policy Modeling, Elsevier, vol. 40(5), pages 959-997.
    20. Kenneth Harttgen & Matthias Opfinger, 2014. "National Identity and Religious Diversity," Kyklos, Wiley Blackwell, vol. 67(3), pages 346-367, August.

    More about this item

    Keywords

    economic diversification; ethnic diversity; Russian regions; ethnolinguistic fractionalization index; Theil decomposition index.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aiy:jnjaer:v:21:y:2022:i:4:p:663-684. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalia Starodubets (email available below). General contact details of provider: https://edirc.repec.org/data/seurfru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.