The impact of R&D and knowledge spillovers on the economic growth of Russian regions

Abstract

AbstractRussia presents an interesting case of a country which has strived to implement innovation policies since the transition period but so far has achieved mixed results. This study aims to analyze the impact of knowledge production and knowledge spillovers on regional growth in Russia within a framework of endogenous growth models. Applying GMM and spatial error panel modeling techniques to Rosstat data for 80 Russian regions from 2005 to 2013, the authors test the hypothesis about the relevance of R&D and expenditure on technological innovations (H1) and the hypothesis about the relevance of knowledge spillovers (H2) on the growth rates of GRP per capita. Hypothesis 1 was confirmed while Hypothesis 2 was rejected, indicating the absorptive capacities of innovatively lagging regions were not high enough for effective adaptation of new technologies from technologically innovative regions. Inclusion of indicators related to additional channels of knowledge diffusion in regressions resulted in the relevance of FDI and imports of goods and services for regional growth. Results of the study could form the basis for developing innovation policies for the Russian regions.