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Economic Development, Geography, and Trade: Evidence from Russian Regions, 2000-2012

Kazuhiro Kumo, Irina Korgun

Abstract


This paper deals with the problem of economic growth and spatial
development in Russia. It follows a theoretical framework of economic geography in
terms of factors of the first and the second nature. According to economic geography,
natural resource endowment, transportation costs, distance to markets and population
distribution among other factors produce strong influence on economic performance
of countries and regions. Using data for Russian regions, we test the effect of these
factors on the level of economic development in Russian regions during 2000-2012,
when they achieved high rates of growth. Our results support earlier theoretical and
empirical findings in several aspects. First, we observe a positive effect of trade on
economic growth in Russian regions during the period under review. Second, the first
nature factors included as a distance to two main trading partners, Berlin and Beijing,
were significant determinants of improvements in the levels of economic development
across Russian regions. This work differs from others by the fact that we control for
natural resource endowment in order to minimize the resource rent effect on regional
economic growth in Russia.


Keywords


Trade - Russia - Regional Economy - Growth - Trade

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DOI: https://doi.org/10.14666/2194-7759-4-2-004

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