IDEAS home Printed from
   My bibliography  Save this paper

Urbanization and Economic Development in Russia


  • Evgeniya Kolomak


The paper studies trends in the urbanization in Russia and compares them with the global ones. Russia has high level of urbanization, urban population reached 73% in 1990, and the rate of urbanization fluctuates around this level past 20 years. The change of the urban population in Russia is influenced by three factors: natality, migration and the administrative reforms. The latter includes the establishing of new urban settlements and transformation of rural settlements into urban or vice versa. Starting in 1992, the low birth rate has become a major factor in reducing the number of urban residents. Immigration from cities was observed in 1991-1992 and it exacerbated the decline of the urban population of Russia. The administrative reorganizations had significant impact on the official statistical data on the urban population in Russia, especially in 1991, 1992, 1999, and 2004. The paper discusses advantages and disadvantages of the urbanization to the economic development and provides empirical analysis of the relationship between the economic growth and the urbanization in Russian regions. Russian regions differ significantly in urbanization, both at the macroeconomic level and the subnational one. Tested hypotheses are the following: 1) urbanization stimulates growth of regional productivity in Russia; 2) the positive effect of urbanization on the regional productivity in Russia is decreasing and at some level becomes an impeding factor; 3) large cities demonstrate higher performance and create positive externalities for the overall regional development. The idea of econometric estimates is to expand an aggregate regional production function including urbanization level and agglomeration capacity of the cities. We use panel annual data for 79 Russian regions and covered period is 2000 – 2008. Estimation tool is fixed effects least squares. The estimates show that increase of share of urban population in the country by 1% gives rise of the average regional productivity by 8%. However, the effect of urbanization is reducing. The growth of a city size per 1 thousand residents would increase economic productivity by 0.1% only. The conclusion is that despite the high level of urbanization in Russia and a number of negative effects of the concentration of economic activity in the cities, the resources of urbanization are not exhausted. Cities develop effectively creating positive externalities and growth impulses on surrounding areas in Russian regions. The potential of changes in the structure of urban settlements in favor of large cities exists, but it is very small.

Suggested Citation

  • Evgeniya Kolomak, 2012. "Urbanization and Economic Development in Russia," ERSA conference papers ersa12p82, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa12p82

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Anne White, 2007. "Internal Migration Trends in Soviet and Post-Soviet European Russia," Europe-Asia Studies, Taylor & Francis Journals, vol. 59(6), pages 887-911.
    2. Brülhart, Marius & Mathys, Nicole A., 2008. "Sectoral agglomeration economies in a panel of European regions," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 348-362, July.
    3. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    4. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," 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 49, pages 2119-2171, Elsevier.
    5. Nakamura, Ryohei, 1985. "Agglomeration economies in urban manufacturing industries: A case of Japanese cities," Journal of Urban Economics, Elsevier, vol. 17(1), pages 108-124, January.
    6. Békés, Gábor & Harasztosi, Péter, 2013. "Agglomeration premium and trading activity of firms," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 51-64.
    7. Robert M. Buckley & Eugene N. Gurenko, 1998. "Housing demand in Russia: Rationing and reform1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(1), pages 197-209, May.
    8. J. V. Henderson & J. F. Thisse (ed.), 2004. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 4, number 4.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. SHIDA, Yoshisada, 2021. "Does the Currency Crisis Veil the Impact of Economic Sanctions under an Authoritarian Regime? An Inquiry into Russia," RRC Working Paper Series 91, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    2. Kazuhiro Kumo & Elena Shadrina, 2021. "On the Evolution of Hierarchical Urban Systems in Soviet Russia, 1897–1989," Sustainability, MDPI, vol. 13(20), pages 1-17, October.

    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. Oleksandr Shepotylo, 2012. "Cities in Transition," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 54(3), pages 661-688, September.
    2. Martin Andersson & Hans Lööf, 2011. "Agglomeration and productivity: evidence from firm-level data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 601-620, June.
    3. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    4. Evgeniya Kolomak, 2020. "Spatial development of the post‐Soviet Russia: Tendencies and factors," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(4), pages 579-594, August.
    5. repec:hal:spmain:info:hdl:2441/1kv8mtgl748r0ahh12air9erdc is not listed on IDEAS
    6. Békés, Gábor & Harasztosi, Péter, 2013. "Agglomeration premium and trading activity of firms," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 51-64.
    7. Lichao Wu & Yanpeng Jiang & Lili Wang & Xinhao Qiao, 2022. "The two faces of urbanisation and productivity: Enhance or inhibit? New evidence from Chinese firm‐level data," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 36(1), pages 126-142, May.
    8. María Ayuda & Fernando Collantes & Vicente Pinilla, 2010. "From locational fundamentals to increasing returns: the spatial concentration of population in Spain, 1787–2000," Journal of Geographical Systems, Springer, vol. 12(1), pages 25-50, March.
    9. Neil Foster & Robert Stehrer, 2009. "Sectoral Productivity, Density and Agglomeration in the Wider Europe," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(4), pages 427-446.
    10. Alessia Matano & Paolo Naticchioni, 2009. "Wage distribution and the spatial sorting of workers and firms," Working Papers - Dipartimento di Economia 8-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2009.
    11. David C. Maré & Jason Timmins, 2006. "Geographic concentration and firm productivity," Working Papers 06_08, Motu Economic and Public Policy Research.
    12. Zheng Shi & Zheng Wen & Jin Xia, 2010. "A Simple, Analytically Solvable, Dual-Space Economic Agglomerations Model," Networks and Spatial Economics, Springer, vol. 10(2), pages 261-271, June.
    13. Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2017. "Agglomeration economies in the formal and informal sectors : a Bayesian spatial approach," IDE Discussion Papers 666, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    14. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    15. Masayuki Morikawa, 2011. "Economies of Density and Productivity in Service Industries: An Analysis of Personal Service Industries Based on Establishment-Level Data," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 179-192, February.
    16. Delgado, Mercedes & Porter, Michael E. & Stern, Scott, 2014. "Clusters, convergence, and economic performance," Research Policy, Elsevier, vol. 43(10), pages 1785-1799.
    17. Koh, Hyun-Ju & Riedel, Nadine & Böhm, Tobias, 2013. "Do governments tax agglomeration rents?," Journal of Urban Economics, Elsevier, vol. 75(C), pages 92-106.
    18. Eugenia Anatolyevna Kolomak, 2018. "Why Cities Emerge and Grow? Explanations of Theoretical and Empirical Studies," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 2, pages 134-153.
    19. Gerald A. Carlino & Robert M. Hunt, 2009. "What explains the quantity and quality of local inventive activity?," Working Papers 09-12, Federal Reserve Bank of Philadelphia.
    20. Christian Düben & Melanie Krause, 2021. "Population, light, and the size distribution of cities," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 189-211, January.
    21. Arimoto, Yutaka & Nakajima, Kentaro & Okazaki, Tetsuji, 2014. "Sources of productivity improvement in industrial clusters: The case of the prewar Japanese silk-reeling industry," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 27-41.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:wiw:wiwrsa:ersa12p82. 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: Gunther Maier (email available below). General contact details of provider: .

    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.