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Understanding Russian regions’ economic performance during periods of decline and growth—An extreme bound analysis approach

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  • Ahrend, Rüdiger

Abstract

This article uses “extreme-bound”-type analysis to revisit the determinants behind the widely differing economic growth in Russian regions prior to the recent global financial crisis. Using data of regional growth in 1995–2006 for 77 Russian regions, it examines the growth drivers for the phase of economic decline up to 1998 and for the period of strong growth afterwards separately. Looking at forty variables considered to be potentially related to growth, it determines, for each of the two periods, the ones robustly associated with Russian economic performance. Among the variables considered are proxies of politico-institutional features, indicators of economic reform, and measurements of both economic and non-economic initial conditions. The main findings are as follows: during the period of economic decline up to 1998, differences in Russian regional growth were almost entirely driven by initial conditions, with resource and human capital endowments, industrial structure, and geographical location playing the dominant roles. However, after the 1998 crisis, the importance of initial conditions declined and was basically reduced to fuel production, advantageous geographical location, and population structure. There is also some evidence that more reform-oriented policies and better regional leadership made a difference. These results could be seen as pointing to determinants of economic performance in periods of actual economic decline being different from those in normal times of economic growth.

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  • Ahrend, Rüdiger, 2012. "Understanding Russian regions’ economic performance during periods of decline and growth—An extreme bound analysis approach," Economic Systems, Elsevier, vol. 36(3), pages 426-443.
  • Handle: RePEc:eee:ecosys:v:36:y:2012:i:3:p:426-443 DOI: 10.1016/j.ecosys.2011.10.002
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    Cited by:

    1. Alisher Akhmedjonov & Irina N. Il’ina & Carol S. Leonard & Zafar Nazarov & Evgenij E. Plisetskij & Elena S. Vakulenko, 2013. "Russia’s regions: governance and Well-being, 2000-2008," HSE Working papers WP BRP 42/EC/2013, National Research University Higher School of Economics.
    2. Roman Horváth & Ayaz Zeynalov, 2014. "The Natural Resource Curse in Post-Soviet Countries : The Role of Institutions and Trade Policies," Working Papers 341, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    3. Ichiro Iwasaki & Keiko Suganuma, 2015. "Foreign direct investment and regional economic development in Russia: an econometric assessment," Economic Change and Restructuring, Springer, vol. 48(3), pages 209-255, November.
    4. repec:taf:regstd:v:50:y:2016:i:11:p:1849-1862 is not listed on IDEAS
    5. Horváth, Roman & Zeynalov, Ayaz, 2016. "Natural resources, manufacturing and institutions in post-Soviet countries," Resources Policy, Elsevier, vol. 50(C), pages 141-148.
    6. Dementiev, Andrei, 2016. "Strategic partnerships in local public transport," Research in Transportation Economics, Elsevier, vol. 59(C), pages 65-74.
    7. Frey, Daniel & Frey, Miriam & Wieslhuber, Carmen, 2013. "Do natural resources define convergence clubs? Empirical evidence from the Kazakh regions," Economic Systems, Elsevier, vol. 37(3), pages 404-414.
    8. Irina N. Ilina & Carol S. Leonard & Evgenij E. Plisetskij, 2014. "Russian Regional Resilience: Finance, Cooperation And Resource Abundance (A Case Study Of Khanty-Mansiysk)," HSE Working papers WP BRP 15/PA/2014, National Research University Higher School of Economics.
    9. Lev Freinkman & Konstantin A. Kholodilin & Ulrich Thießen, 2009. "Incentive Effects of Fiscal Equalization: Has Russian Style Improved?," Discussion Papers of DIW Berlin 912, DIW Berlin, German Institute for Economic Research.
    10. Markus Eller & Jarko Fidrmuc & Zuzana Fungáčová, 2016. "Fiscal Policy and Regional Output Volatility: Evidence from Russia," Regional Studies, Taylor & Francis Journals, vol. 50(11), pages 1849-1862, November.

    More about this item

    Keywords

    Russia; Transition; Regional economics; Extreme-bound analysis; Economic growth; Economic decline; Natural resources; Initial conditions; Economic reform; Political economy;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P2 - Economic Systems - - Socialist Systems and Transition Economies
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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