IDEAS home Printed from https://ideas.repec.org/p/hig/wpaper/232-ec-2020.html
   My bibliography  Save this paper

Regional Convergence In Russia: Estimating A Neoclassical Growth Model

Author

Listed:
  • Hartmut Lehmann

    (National Research University Higher School of Economics)

  • Aleksey Oshchepkov

    (National Research University Higher School of Economics)

  • Maria Giulia Silvagni

    (University of Bologna)

Abstract

This paper studies the convergence in per capita gross regional products (GRPs) across Russian regions in the period from 1996 to 2017. We estimate growth equations, which are directly derived from a neoclassical growth model, augmented with human capital and migration. To our knowledge, this is the first paper that explicitly applies a neoclassical model to analyze regional convergence in Russia. We also take into account possible spatial effects and do a series of other robustness checks. Our main estimates establish a convergence rate of around 2% per year. While we fail to find any role of human capital for regional economic growth, we find that interregional migration and the interdependencies of the growth of Russian regions contribute to the economic convergence between them.

Suggested Citation

  • Hartmut Lehmann & Aleksey Oshchepkov & Maria Giulia Silvagni, 2020. "Regional Convergence In Russia: Estimating A Neoclassical Growth Model," HSE Working papers WP BRP 232/EC/2020, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:232/ec/2020
    as

    Download full text from publisher

    File URL: https://wp.hse.ru/data/2020/06/15/1605031154/232EC2020%20%D0%BE%D1%82%2014.06.2020.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mr. Antonio Spilimbergo & Ms. Natasha X Che, 2012. "Structural Reforms and Regional Convergence," IMF Working Papers 2012/106, International Monetary Fund.
    2. Konstantin A. Kholodilin & Aleksey Oshchepkov & Boriss Siliverstovs, 2012. "The Russian Regional Convergence Process," Eastern European Economics, Taylor & Francis Journals, vol. 50(3), pages 5-26, May.
    3. Ms. Irina Dolinskaya & Ms. Irina Tytell, 2002. "Transition and Regional Inequality in Russia: Reorganization or Procrastination?," IMF Working Papers 2002/169, International Monetary Fund.
    4. Yu, Jihai & de Jong, Robert & Lee, Lung-fei, 2008. "Quasi-maximum likelihood estimators for spatial dynamic panel data with fixed effects when both n and T are large," Journal of Econometrics, Elsevier, vol. 146(1), pages 118-134, September.
    5. Kukenova, Madina & Monteiro, Jose-Antonio, 2008. "Spatial Dynamic Panel Model and System GMM: A Monte Carlo Investigation," MPRA Paper 11569, University Library of Munich, Germany, revised Nov 2008.
    6. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    7. Elena Vakulenko, 2016. "Does migration lead to regional convergence in Russia?," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 9(1), pages 1-25.
    8. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2016. "Immigration and economic growth in the OECD countries 1986–2006," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 340-360.
    9. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    10. Maria Abreu & Henri L. F. de Groot & Raymond J. G. M. Florax, 2005. "A Meta‐Analysis of β‐Convergence: the Legendary 2%," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 389-420, July.
    11. Michael Dunford, 1996. "Disparities in Employment, Productivity and Output in the EU: The Roles of Labour Market Governance and Welfare Regimes," Regional Studies, Taylor & Francis Journals, vol. 30(4), pages 339-357.
    12. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    13. Gabriel Di Bella & Oksana Dynnikova & Mr. Francesco Grigoli, 2017. "Fiscal Federalism and Regional Performance," IMF Working Papers 2017/265, International Monetary Fund.
    14. Thorsten Beck & Luc Laeven, 2006. "Institution building and growth in transition economies," Journal of Economic Growth, Springer, vol. 11(2), pages 157-186, June.
    15. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    16. Sergei Guriev & Elena Vakulenko, 2012. "Convergence between Russian regions," Working Papers w0180, New Economic School (NES).
    17. Angrist,Noam & Djankov,Simeon & Goldberg,Pinelopi Koujianou & Patrinos,Harry Anthony, 2019. "Measuring Human Capital," Policy Research Working Paper Series 8742, The World Bank.
    18. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    19. Bernard Fingleton & Enrique López‐Bazo, 2006. "Empirical growth models with spatial effects," Papers in Regional Science, Wiley Blackwell, vol. 85(2), pages 177-198, June.
    20. Philippe Aghion & Peter Howitt & David Mayer-Foulkes, 2005. "The Effect of Financial Development on Convergence: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 173-222.
    21. 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.
    22. Aleksey Oshchepkov, 2015. "Compensating Wage Differentials Across Russian Regions," AIEL Series in Labour Economics, in: Chiara Mussida & Francesco Pastore (ed.), Geographical Labor Market Imbalances. Recent Explanations and Cures, edition 1, chapter 4, pages 65-105, AIEL - Associazione Italiana Economisti del Lavoro.
    23. Fischer, Lorenz Benedikt & Pfaffermayr, Michael, 2018. "The more the merrier? Migration and convergence among European regions," Regional Science and Urban Economics, Elsevier, vol. 72(C), pages 103-114.
    24. Oleg Badunenko & Kiril Tochkov, 2010. "Soaring dragons, roaring tigers, growling bears," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(3), pages 539-570, July.
    25. Hansjörg Blöchliger & Olivier Durand-Lasserve, 2018. "The drivers of regional growth in Russia: A baseline model with applications," OECD Economics Department Working Papers 1523, OECD Publishing.
    26. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    27. Hanushek, Eric A., 2013. "Economic growth in developing countries: The role of human capital," Economics of Education Review, Elsevier, vol. 37(C), pages 204-212.
    28. Sergio Rey & Brett Montouri, 1999. "US Regional Income Convergence: A Spatial Econometric Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 143-156.
    29. Falcetti, Elisabetta & Lysenko, Tatiana & Sanfey, Peter, 2006. "Reforms and growth in transition: Re-examining the evidence," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 421-445, September.
    30. Valentina Meliciani, 2006. "Income and employment disparities across European regions: The role of national and spatial factors," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 75-91.
    31. Popov, Vladimir, 2001. "Reform Strategies and Economic Performance of Russia's Regions," World Development, Elsevier, vol. 29(5), pages 865-886, May.
    32. Barro, Robert T. & Sala-I-Martin, Xavier, 1992. "Regional growth and migration: A Japan-United States comparison," Journal of the Japanese and International Economies, Elsevier, vol. 6(4), pages 312-346, December.
    33. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    34. Robert J. Barro, 2015. "Convergence and Modernisation," Economic Journal, Royal Economic Society, vol. 125(585), pages 911-942, June.
    35. Skorobogatov, Alexander S., 2018. "Why do newer cities promise higher wages in Russia?," Journal of Urban Economics, Elsevier, vol. 104(C), pages 16-34.
    36. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, July.
    37. Vladimir Popov, 2001. "Reform Strategies and Economic Performance: The Russian Far East as Compared to Other Regions," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 43(4), pages 33-66, December.
    38. Fedorov, Leonid, 2002. "Regional Inequality and Regional Polarization in Russia, 1990-99," World Development, Elsevier, vol. 30(3), pages 443-456, March.
    39. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2010. "The effect of migration on income growth and convergence: Meta‐analytic evidence," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 537-561, August.
    40. Shankar, Raja & Shah, Anwar, 2003. "Bridging the Economic Divide Within Countries: A Scorecard on the Performance of Regional Policies in Reducing Regional Income Disparities," World Development, Elsevier, vol. 31(8), pages 1421-1441, August.
    41. Cashin, Paul, 1995. "Economic Growth and Convergence across the Seven Colonies of Australasia: 1861-1991," The Economic Record, The Economic Society of Australia, vol. 71(213), pages 132-144, June.
    42. Zemtsov, S. & Smelov, Y., 2018. "Factors of Regional Development in Russia: Geography, Human Capital and Regional Policies," Journal of the New Economic Association, New Economic Association, vol. 40(4), pages 84-108.
    43. Maria Kaneva & Galina Untura, 2019. "The impact of R&D and knowledge spillovers on the economic growth of russian regions," Growth and Change, Wiley Blackwell, vol. 50(1), pages 301-334, March.
    44. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vicente German-Soto & Gregory Brock, 2023. "Before the isolation: Russian regional β-convergence 2001–2019 before the pandemic and Ukrainian war," Economic Change and Restructuring, Springer, vol. 56(4), pages 2729-2746, August.
    2. K. P. Gluschenko, 2023. "Regional Inequality in Russia: Anatomy of Convergence," Regional Research of Russia, Springer, vol. 13(1), pages 1-12, December.
    3. Leone Leonida, 2023. "What Have We Not Learned from the Convergence Debate?," Mathematics, MDPI, vol. 11(9), pages 1-22, April.
    4. Vicente German-Soto & Gregory Brock, 2022. "Overall US and Census Region β-Convergence 1963–2015 Controlling for Spatial Effects," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 44-67, March.
    5. Evguenia Bessonova & Anna Tsvetkova, 2022. "Do Productivity Laggards Ever Catch Up With Leaders?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S1), pages 71-107, April.

    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. Lehmann, Hartmut & Silvagni, Maria Giulia, 2013. "Is There Convergence of Russia's Regions? Exploring the Empirical Evidence: 1995–2010," IZA Discussion Papers 7603, Institute of Labor Economics (IZA).
    2. Kubis, Alexander & Schneider, Lutz, 2012. "Human capital mobility and convergence : a spatial dynamic panel model of the German regions," IAB-Discussion Paper 201223, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Romano Piras, 2013. "Can the Augmented Solow Model with Migration Explain the Italian Internal Brain Drain?," LABOUR, CEIS, vol. 27(2), pages 140-163, June.
    4. Cristian Incaltarau & Gabriela Carmen Pascariu & Adelaide Duarte & Peter Nijkamp, 2021. "Migration, regional growth and convergence: a spatial econometric study on Romania," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(3), pages 497-532, June.
    5. Cristian Incaltarau & Ilkhom Sharipov & Gabriela Carmen Pascariu & Teodor Lucian Moga, 2022. "Growth and convergence in Eastern Partnership and Central Asian countries since the dissolution of the USSR—embarking on different development paths?," Development Policy Review, Overseas Development Institute, vol. 40(1), January.
    6. Celbis M.G. & Crombrugghe D.P.I. de, 2014. "Can internet infrastructure help reduce regional disparities? : evidence from Turkey," MERIT Working Papers 2014-078, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    8. Tobias Hagen & Philipp Mohl, 2011. "Econometric Evaluation of EU Cohesion Policy: A Survey," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 16, Edward Elgar Publishing.
    9. Jochen Hartwig, 2009. "A panel Granger-causality test of endogenous vs. exogenous growth," KOF Working papers 09-231, KOF Swiss Economic Institute, ETH Zurich.
    10. Bayraktar-Sağlam, Bahar & Yetkiner, Hakan, 2014. "A Romerian contribution to the empirics of economic growth," Journal of Policy Modeling, Elsevier, vol. 36(2), pages 257-272.
    11. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    12. Stephen Dobson & Carlyn Ramlogan & Eric Strobl, 2006. "Why Do Rates Of Β‐Convergence Differ? A Meta‐Regression Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(2), pages 153-173, May.
    13. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    14. Petreski, Marjan, 2009. "Analysis of exchange-rate regime effect on growth: theoretical channels and empirical evidence with panel data," Economics Discussion Papers 2009-49, Kiel Institute for the World Economy (IfW Kiel).
    15. Nadia Doytch, 2021. "Who Gains from Services FDI—Host or Home Economies? An Analysis of Disaggregated Services FDI Inflows and Outflows of 24 European Economies," Foreign Trade Review, , vol. 56(3), pages 257-288, August.
    16. Hauk, William R., 2017. "Endogeneity bias and growth regressions," Journal of Macroeconomics, Elsevier, vol. 51(C), pages 143-161.
    17. Vogel, Johanna, 2013. "Regional Convergence in Europe: A Dynamic Heterogeneous Panel Approach," MPRA Paper 51794, University Library of Munich, Germany.
    18. Arshad Ali Bhatti & M. Emranul Haque & Denise R. Osborn, 2013. "Is the Growth Effect of Financial Development Conditional on Technological Innovation?," Centre for Growth and Business Cycle Research Discussion Paper Series 188, Economics, The University of Manchester.
    19. Matteo Lanzafame, 2005. "Economic structure, technology diffusion and convergence - the case of the Italian regions," ERSA conference papers ersa05p323, European Regional Science Association.
    20. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," MPRA Paper 115610, University Library of Munich, Germany.

    More about this item

    Keywords

    convergence; economic growth; regional economics; migration; Russia;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hig:wpaper:232/ec/2020. 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: Shamil Abdulaev or Shamil Abdulaev (email available below). General contact details of provider: https://edirc.repec.org/data/hsecoru.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.