| By: |
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. |
| Keywords: |
Transport infrastructure; gravity; distance; travel time; market access; multi-factor productivity; Russia |
| JEL: |
D24 H54 R12 R53 |
| Date: |
2008–07–18 |
| URL: |
http://d.repec.org/n?u=RePEc:ris:eibpap:2008_010&r=cis |