ECONOMIC GROWTH DUE TO EXPORT EXTERNALITIES: A SPATIAL ECONOMETRIC ANALYSIS FOR RUSSIAN REGIONS, 2003-2008
This paper investigates the determinants of economic growth paying special attention to the role of export and spatial externalities. Our paper deals with recent approaches to implied export productivity levels. It is argued that the concept of related variety should be taken into account while computing export-productivity levels. We suppose that not industry variety per se but variety of related industries significantly contributes to economic growth in Russian regions. Relying on the related variety arguments, we empirically estimate the impact of related variety in export portfolio and spatial dependence on economic growth in Russian regions in two steps. First, we test for the existence of spatial dependence in economic growth across Russian regions using three traditional indicators of technological progress. Second, we construct a simple theoretical model, where economic growth is exogenously determined and depends primarily on export externalities. Spatial dependence is captured in the model by spatial lags in the explanatory variables. Empirical analysis at a refined level of sectoral and spatial aggregation shows that export externalities have positive and significant impact on the employment growth in most sectors of the economy. Simultaneously, spatially lagged export productivity have different effects on employment growth depending on sector: decelerating economic growth in industrial sectors and accelerating development of most advanced service sectors.