The Spatial Aspects of Transformation of the Manufacturing Sector in the Russian Regions in the 2000s

Abstract

The rapid economic recovery of Russia between the economic crises of 1998 and 2008-2009 in terms of GDP per capita and standards of living was accompanied by a loss of ca. 25 percent of manufacturing jobs in the whole economy. On the one hand, it was associated with adjustment of large and often overstaffed manufacturing plants created within the planned economy to the market economy with presumably more efficient allocation of labor. On the other hand, the transition to the market economy was accompanied by the dramatic decline in a number of manufacturing industries and relocation of labor to the services sector due to disruption of once well-established relations between enterprises-suppliers and enterprises-buyers in neighboring Soviet republics that became independent states. Finally, the changing patterns in the federal government policy towards different manufacturing industries also contributed to the transformation of the manufacturing sector in the 1990s and the 2000s. This paper seeks to find answers to the following questions, namely, (1) how employment changed in manufacturing industries over 2002-2009, (2) how regions performed in manufacturing industries in comparison to the national average, (3) whether the specialization of regions in manufacturing has changed or not, (4) whether manufacturing industries have become more concentrated or not, (5) what the degree of industrial concentration of manufacturing industries in Russia is, compared with such advanced market economies as the USA and France? We study redistribution of 97 manufacturing activities across 81 Russian regions over 2002-2009 using employment at both three-digit level of the Russian Classification of Economic Activities (OKVED) and enterprise level. To reveal spatial patterns of manufacturing transformation we apply the location quotient, the shift-share analysis, and several indices of spatial and industrial concentration such as the Isard index, the Theil index, and the Ellison-Glaeser index.