Death of distance? Economic implications of infrastructure improvement in Russia
AbstractWe 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 InfoPaper provided by European Investment Bank, Economics Department in its series EIB Papers with number 10/2008.
Length: 22 pages
Date of creation: 18 Jul 2008
Date of revision:
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Transport infrastructure; gravity; distance; travel time; market access; multi-factor productivity; Russia;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-CIS-2009-05-23 (Confederation of Independent States)
- NEP-GEO-2009-05-23 (Economic Geography)
- NEP-TRA-2009-05-23 (Transition Economics)
- NEP-URE-2009-05-23 (Urban & Real Estate Economics)
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- 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.
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