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Death of distance? Economic implications of infrastructure improvement in Russia

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Author Info

  • Brown, David

    (Heriot-Watt University)

  • Fay, Marianne

    ()
    (World Bank)

  • V. Lall, Somik

    ()
    (World Bank)

  • Gun Wang, Hyoung

    (World Bank)

  • Felkner, John

    (University of Chicago)

Abstract

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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Bibliographic Info

Paper provided by European Investment Bank, Economics Department in its series EIB Papers with number 10/2008.

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Length: 22 pages
Date of creation: 18 Jul 2008
Date of revision:
Handle: RePEc:ris:eibpap:2008_010

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Related research

Keywords: Transport infrastructure; gravity; distance; travel time; market access; multi-factor productivity; Russia;

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Cited by:
  1. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "The golden quadrilateral highway project and urban/rural manufacturing in India," Policy Research Working Paper Series 6620, The World Bank.
  2. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highway to success in India : the impact of the golden quadrilateral project for the location and performance of manufacturing," Policy Research Working Paper Series 6320, The World Bank.
  3. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2012. "Is India's Manufacturing Sector Moving Away From Cities?," NBER Working Papers 17992, National Bureau of Economic Research, Inc.

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