IDEAS home Printed from
   My bibliography  Save this paper

Spatial evolution of economic activity in Russia: New economic geography perspective


  • Evgeniya Kolomak



We study the dynamics of inter-regional economic disparities for a number of development characteristics, test the hypothesis of the new economic geography and connect the results with the prediction of the bell curve describing spatial concentration over time. The results of our analysis suggest that the concentration of economic activity continues in Russia and that the pace of the interregional divergence is rather high. These findings bring us to the conclusion that the country rests at the left side of the bell-shaped relationship between interaction costs and spatial distribution. Both the western and eastern regions experience centripetal tendencies; however, despite predictions, no essential redistribution of the production factors and outputs from the East to the West is revealed. In other words, first nature (the East's natural resources and raw materials, which are highly valued in the global market) is balanced by second nature (the West's better infrastructure and large markets). The significant factors in spatial concentration and total productivity growth are density, the size of and access to markets and the diversity of the economy. Insensitivity to the diversification is specific to the eastern regions of Russia. There are also sectorial peculiarities: population density and proximity to markets negatively influences; due to the immobility of supply. External markets have no significant effect on construction. Due to fierce competition, sectorial specialization decreases both productivity and the rate of concentration. These results of the estimates are in accordance with the predictions of the new economic geography. One of the practical ideas suggested by this analysis is the conclusion that in the near future, we will observe further concentration of economic activity and interregional divergence in Russia. The forces behind the agglomeration economy and regional disparities are market-based (increasing returns to scale and imperfect competition), and they are beginning to play a major role in the country in the transition and in the post-transition period. Despite the active regional policy and the massive redistribution efforts undertaken by the central government, regional disparities continue to grow. The new economic geography theory describes the mechanisms of agglomeration and provides suggestions for the pro-dispersion forces to countervail centripetal tendencies. Translated into the language of the practical recommendations, they include essential improvement of transport and communication infrastructure, radical decreases in trade cost and the elimination of regional institutional barriers, as well as an active social policy supporting lagging regions.

Suggested Citation

  • Evgeniya Kolomak, 2014. "Spatial evolution of economic activity in Russia: New economic geography perspective," ERSA conference papers ersa14p95, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa14p95

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Berkowitz, Daniel & DeJong, David N., 2003. "Policy reform and growth in post-Soviet Russia," European Economic Review, Elsevier, vol. 47(2), pages 337-352, April.
    2. Combes, Pierre-Philippe & Lafourcade, Miren & Thisse, Jacques-François & Toutain, Jean-Claude, 2011. "The rise and fall of spatial inequalities in France: A long-run perspective," Explorations in Economic History, Elsevier, vol. 48(2), pages 243-271, April.
    3. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    4. Head, Keith & Mayer, Thierry & Ries, John, 2002. "On the Pervasiveness of Home Market Effects," Economica, London School of Economics and Political Science, vol. 69(275), pages 371-390, August.
    5. Rudiger Ahrend, 2005. "Speed of Reform, Initial Conditions or Political Orientation? Explaining Russian Regions' Economic Performance," Post-Communist Economies, Taylor & Francis Journals, vol. 17(3), pages 289-317.
    6. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
    7. Tabuchi, Takatoshi & Thisse, Jacques-Francois, 2002. "Taste heterogeneity, labor mobility and economic geography," Journal of Development Economics, Elsevier, vol. 69(1), pages 155-177, October.
    8. Konstantin Gluschenko, 2010. "Methodologies of Analyzing Inter-Regional Income Inequality and Their Applications to Russia," William Davidson Institute Working Papers Series wp984, William Davidson Institute at the University of Michigan.
    9. Rosés, Joan Ramón & Martínez-Galarraga, Julio & Tirado, Daniel A., 2010. "The upswing of regional income inequality in Spain (1860-1930)," Explorations in Economic History, Elsevier, vol. 47(2), pages 244-257, April.
    10. Berkowitz, Daniel & DeJong, David N., 2002. "Accounting for growth in post-Soviet Russia," Regional Science and Urban Economics, Elsevier, vol. 32(2), pages 221-239, March.
    11. Daniel Berkowitz & David N. DeJong, 2005. "Entrepreneurship and Post-socialist Growth," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(1), pages 25-46, February.
    12. Quah, Danny T, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," Journal of Economic Growth, Springer, vol. 2(1), pages 27-59, March.
    13. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8o4o0m0g is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item


    regional disparities; economic geography; empirical estimates; Russia;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    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:ersa14p95. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier). General contact details of provider: .

    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 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.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.