Inter-and intra-regional disparities in Russia: Factors of uneven economic growth

Abstract

Despite the growing body of literature on the dependence of economic growth from different factors, the reasons for uneven growth remain unclear. Within the country, regions have different growth rates in their diverse parts. It is unclear why the same factor could influence municipalities differently. To reveal this reason, we used hierarchical linear modeling with spatial dependence, which allows us to decompose variation into regional and municipal scales and take into account spatial autocorrelation. We conducted our research on data for 2239 municipalities within 85 Russian regions in 2019. Our model incorporates 20 factors of economic growth, with 7 at the municipal scale. Cross-interaction estimates established that factors attributed to the regional level determined the relationship between dependent variables (growth rate of production, growth rate of social benefits, and taxable income) at the municipal level and predictors. The influence of initial level, investments in fixed assets, employment on municipal growth varies greatly depending on such regional determinants as economic structure, innovation, human capital, and inequality. This paper adds to the existing literature on uneven economic growth at a smaller scale (municipality) and at the same time helps to rethink inter-and intra-regional disparities.