Regional Convergence in Russia: Estimating a Neoclassical Growth Model

Abstract

This paper studies the convergence in per capita gross regional products (GRPs) across Russian regions in the period from 1996 to 2017. We estimate growth equations, which are directly derived from a neoclassical growth model, augmented with human capital and migration. To our knowledge, this is the first paper that explicitly applies a neoclassical model to analyze regional convergence in Russia. We also take into account possible spatial effects and do a series of other robustness checks. Our main estimates establish a convergence rate of around 2% per year. While we fail to find any role of human capital for regional economic growth, we find that interregional migration and the interdependencies of the growth of Russian regions contribute to the economic convergence between them.