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Regional Convergence in Russia: Estimating an Augmented Solow Model
This paper studies the convergence in per capita gross regional products across Russian regions in the period from 1996 to 2017. By applying system GMM technique we estimate growth equations, which are directly derived from the classic Solow model, augmented with human capital and migration and considering possible spatial effects. Our main estimates establish a convergence rate of around 2% per year. While interregional migration and the interdependencies of the growth of Russian regions contribute to the convergence process, the role of human capital is ambiguous: when we employ system GMM we do not find any significant impact of human capital on regional growth, no matter how we measure human capital, while pooled OLS estimates establish a positive contribution.