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Assessment of the urbanization impact on economic growth in Russia

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Abstract

The paper studies urbanization trends in Russia, discusses the advantages and disadvantages of the urbanization process for economic development, and provides an empirical analysis of the relationship between economic growth and urbanization in Russian regions. The tested hypotheses are the following: (1) urbanization stimulates growth in regional productivity in Russia, (2) the positive effect of urbanization on the regional productivity in Russia is decreasing and at some point will become an impeding factor, and (3) large cities demonstrate higher performance and create positive externalities for the overall regional development.

The idea of econometric estimates is to expand an aggregate regional production function including the urbanization level and the agglomeration capacity of cities. We use annual panel data for 79 Russian regions and cover the period 2000–2008. The estimates obtained show that an increase in the share of the urban population in the country by 1% increases the average regional productivity by 8%. However, the effect of urbanization is reducing. Growth in a city’s size per 1000 residents would increase economic productivity by 0.1% only. Despite the high level of urbanization in Russia and a number of negative effects, the urbanization resources have not been exhausted. Cities develop effectively, creating positive externalities.

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Authors and Affiliations

  1. Institute of Economics and Industrial Engineering, Siberian Branch, Russian Academy of Sciences, Novosibirsk, Russia

    E. A. Kolomak

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  1. E. A. Kolomak
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Correspondence to E. A. Kolomak.

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Original Russian Text © E.A. Kolomak, 2011, published in Region: Ekonomika i Sotsiologiya, 2011, No. 4, pp. 51–69.

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Kolomak, E.A. Assessment of the urbanization impact on economic growth in Russia. Reg. Res. Russ. 2, 292–299 (2012). https://doi.org/10.1134/S2079970512040041

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