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Death of distance? Economic implications of infrastructure improvement in Russia

Author

Listed:
  • Brown, David

    (Heriot-Watt University)

  • Fay, Marianne

    (World Bank)

  • V. Lall, Somik

    (World Bank)

  • Gun Wang, Hyoung

    (World Bank)

  • Felkner, John

    (University of Chicago)

Abstract
We examine the economic implications of infrastructure investment policies that try to improve economic conditions in Russia's peripheral regions. Our analysis of firm-level industrial data for 1989 and 2004 highlights a 'death of distance' in industrial location, with increasing concentration of new firms in regions with good market access. We assess the geographic determinants of growth econometrically and identify market size and proximity to Moscow and regional infrastructure as important drivers of productivity for new and for privately-owned firms. Simulations show that the benefits of infrastructure improvements are highest in the country's capital region where economic activity is already concentrated. Policies that divert public investment towards peripheral regions run the risk of slowing down national economic growth.

Suggested Citation

  • Brown, David & Fay, Marianne & V. Lall, Somik & Gun Wang, Hyoung & Felkner, John, 2008. "Death of distance? Economic implications of infrastructure improvement in Russia," EIB Papers 10/2008, European Investment Bank, Economics Department.
    • Handle: RePEc:ris:eibpap:2008_010
    as

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    File URL: http://www.eib.org/attachments/efs/eibpapers/eibpapers_2008_v13_n02_en.pdf#page=128
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    Citations

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    Cited by:

    1. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2012. "Is India’s Manufacturing Sector Moving Away From Cities?," Harvard Business School Working Papers 12-090, Harvard Business School.
    2. Salimova, Dina & Ponomarev, Yuri, 2021. "Transport infrastructure and geography of regional export in Russia," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 63, pages 51-75.
    3. 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.
    4. Skorobogatov, Alexander S., 2018. "Why do newer cities promise higher wages in Russia?," Journal of Urban Economics, Elsevier, vol. 104(C), pages 16-34.
    5. Çağatay Bircan & Ralph De Haas, 2020. "The Limits of Lending? Banks and Technology Adoption across Russia," The Review of Financial Studies, Society for Financial Studies, vol. 33(2), pages 536-609.
    6. Dina Krasnoselskaya & Venera Timiryanova, 2022. "Do polycentric patterns influence the economic performance of municipalities? Empirical evidence from Russia," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(5), pages 1201-1222, October.
    7. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2016. "Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing," Economic Journal, Royal Economic Society, vol. 126(591), pages 317-357, March.
    8. Das, Abhiman & Ghani, Ejaz & Grover, Arti & Kerr, William & Nanda, Ramana, 2024. "JUE insight: Infrastructure and Finance: Evidence from India’s GQ highway network," Journal of Urban Economics, Elsevier, vol. 142(C).
    9. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highway to success in India : the impact of the golden quadrilateral project for the location and performance of manufacturing," Policy Research Working Paper Series 6320, The World Bank.
    10. Andrey N. Petrov, 2012. "Redrawing the Margin: Re-examining Regional Multichotomies and Conditions of Marginality in Canada, Russia and their Northern Frontiers," Regional Studies, Taylor & Francis Journals, vol. 46(1), pages 59-81, February.
    11. Alexander S. Skorobogatov, 2016. "Spatial Equilibrium Approach to the Analysis of Income Differentials Across Russian Cities," HSE Working papers WP BRP 149/EC/2016, National Research University Higher School of Economics.
    12. S. Zemtsov & V. Barinova & R. Semenova & A. Mikhailov, 2022. "Entrepreneurship Policy and SME Development during Pandemic Crisis in Russia," Regional Research of Russia, Springer, vol. 12(3), pages 321-334, September.
    13. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "The golden quadrilateral highway project and urban/rural manufacturing in India," Policy Research Working Paper Series 6620, The World Bank.
    14. Felkner, John S. & Lee, Hyun & Shaikh, Sabina & Kolata, Alan & Binford, Michael, 2022. "The interrelated impacts of credit access, market access and forest proximity on livelihood strategies in Cambodia," World Development, Elsevier, vol. 155(C).
    15. Coulibaly, Souleymane, 2012. "Rethinking the form and function of cities in post-Soviet countries," Policy Research Working Paper Series 6292, The World Bank.

    More about this item

    Keywords

    Transport infrastructure; gravity; distance; travel time; market access; multi-factor productivity; Russia;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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