Abstract
Satellite data used in combination with a stochastic production function method reveal an inefficient formal economy in rural Rostov Oblast 2013–2015 embedded in an overall (formal and informal) relatively efficient economy with the measurement of both important to better understand non-economic impacts of sanctions. Increased military activity may have insulated the formal economy of the border area from poor economic performance and the deindustrialization that characterizes adjacent areas. The current Oblast Administration’s grant program to localities does not reward relatively efficient economic performance with a model suggested here to change the policy. The region’s economy has the ability to absorb many Ukrainian refugees though non-economic issues support the current assistance from other Russian regions in helping relocate refugees beyond Rostov region. Like other conflict zones, urban areas experience less of an impact relative to rural areas.
Published Version
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