Convergence of Economic Growth in Russian Megacities
Purpose: The article presents the results of an empirical analysis of the economic growth of Russian cities with a population of over 1 million people (megacities). Design/Methodology/Approach: The analyzed indicator is the city product calculated according to the UN methodology for the period from 2010 to 2016. The paper analyses the process of β- and σ-convergence across Russian megacities using methods of spatial econometrics in addition to the traditional β-convergence techniques from the neoclassical theoretical framework. Findings: The dynamics of the coefficient of variation confirmed the presence of σ-convergence in city product. Empirically, positive spatial autocorrelation has been confirmed. Beta-convergence for Russian megacities is found to be significant and the spatial location of megacities significantly affects β convergence. Control factors such as fixed capital investment per capita in 2010, average retail volume per capita in 2010, average annual number of employees of enterprises and organizations in 2010 and the dummy variable introduced for “federal cities” Moscow and St. Petersburg are all found to have positive and statistically significant impact on economic growth. Practical Implications: Policymakers may take the results into account under the planning of economical strategies for megacities and regions in Russia in order to facilitate the regional economic growth and the speed of convergence. Originality/Value: The main contribution of the study is the consideration of the economical growth for the megacities and not for the regions as it often used to be the case in similar studies. The important finding is that megacities‘ economies do converge and the influence of control factors is pronounced.