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Infrastructure endowment as an economic growth driver in the Russian regions

Vol. 28, Iss. 8, AUGUST 2022

Received: 20 February 2019

Received in revised form: 6 March 2019

Accepted: 12 March 2019

Available online: 30 August 2022

Subject Heading: FISCAL SYSTEM

JEL Classification: H54, R11, R15

Pages: 1756–1781

https://doi.org/10.24891/re.17.4.615

Roman M. MEL'NIKOV Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russian Federation
rmmel@mail.ru

ORCID id: not available

Subject. The article focuses on the impact of infrastructure endowment and spatial externalities on the economic growth in the Russian regions.
Objectives. The research is intended to verify the hypothesis stating that characteristics of the existing transportation, power and telecommunication infrastructure in the analyzable region and neighboring ones have a positive effect on economic growth, but the effect is not homogeneous across regions.
Methods. I evaluate panel regression of economic growth with fixed effects and spatial lags of key explanatory variables for various groups of regions, referring to data of the Federal State Statistics Service.
Results. According to estimates, the highest positive effects are recorded in regions specializing in process manufacturing and having medium GRP per capita, since lower transportation costs and time open up much more market opportunities for enterprises residing there. Shortage of power capacity is seen in the north-western regions possessing the largest deposits of mineral resources, which are impossible to produce without power infrastructure facilities. The development of mobile communications and the Internet positively influenced the economic growth in the regions specializing in services and having high GRP per an employed person.
Conclusions. If the comprehensive plan for retrofitting and expansion of road infrastructure for the period up to 2024 is implemented, this will contribute to economic growth rates in regions specializing in process manufacturing and mining. Having been sufficiently financed by private investors, mobile communications and broadband Internet have already been expanded across the Russian regions. Therefore, these growth factors have been substantially run out.

Keywords: infrastructure, regional economy, economic growth, spatial externalities, conditional convergence

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