by Olga Demidova, Higher School of Economics, National Research University, Moscow
Issues concerning Russian regions’ economic growth, convergence or divergence attract the interest of researchers and has continued to be relevant for more than 20 years. Russian regions are very heterogeneous in terms of geography, climate, and endowment with natural resources. Many researchers note that there are huge differences between the Russian regions. This leads to a difference in their economic development.
The subject of this paper is the examination of gross regional product per capita convergence of 80 Russian regions over the 2000-2014 period. The regions have been split into three groups: poor, middle and rich. The main hypotheses tested in this study are:
1) Factors affecting economic growth in poor, medium and rich regions are different.
2) The growth rate of poor, medium and rich regions varies.
3) The growth of Russian regions is affected not only by their internal factors, but also by the condition of other neighboring Russian regions.
With the help of a specially developed spatial-econometric model, significant differences between identified groups of the regions were revealed.
According to the results obtained:
1) There is convergence only for the middle and rich regions, and the speed of convergence for rich regions is sufficiently higher.
2) The situation in neighboring regions affects only growth in rich regions. The better the situation in neighboring regions, the slower is the growth of rich regions.
3) The share of urban population does not influence economic growth.
4) Investments stimulate economic growth only in rich regions, but for the poor regions they have the opposite effect (apparently, investments are inefficiently used).
5) The share of a higher educated labour force does not affect the growth rate.
6) High density of highways stimulates growth only in poor regions, so it makes sense to develop the infrastructure there.
7) The level of economic risk affects the growth rate in accordance with expectations only in the rich regions, and, the lower the risk, the higher the growth. In the middle regions the situation is opposite. The regions with higher level of risk grow faster. This phenomenon deserves further study.
8) Openness of the region to exports and imports does not affect the growth rate.
The results of the estimation also indicate that, when neglecting of the spatial effects, the beta coefficient, which determines the speed of conditional convergence, will be overestimated, more than two times for rich regions.
