Modelling of a regional industry specialisation: the impact of agglomeration economies on labour productivity

Angi Skhvediani, Sergey Sosnovskikh, Tatiana Kudryavtseva and Stella Nalwanga

International Journal of Trade and Global Markets, 2024, vol. 19, issue 3/4, 215-242

Abstract: Localisation economies are known to boost the regional economy and its growth potential. The emergence of these effects is due to localised knowledge flows, the closeness to markets, and the diversity of services and industries. Localisation economies have the potential to increase the productivity of firms. While many studies have been conducted at the industry or regional level, this paper adds to the existing literature by investigating the impact of agglomeration economies on labour productivity with the case of Russian regions during the period 2009-2018. Our findings suggest contradicting results toward existing studies. We have found a negative impact of externalities on labour productivity. This is due to Russian business and economic peculiarities and institutional factors, such as disrupted territorial-industrial complexes, uncompetitive industries, underdeveloped infrastructure, and a lack of state funding.

Keywords: agglomeration effect; government; industrialisation; industrial cluster; innovation; investment; labour productivity; localisation economy; manufacturing sector; regional economy; Russia. (search for similar items in EconPapers)
Date: 2024
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