Regional Convergence of Income: Spatial Analysis

Russia has a huge territory and a strong interregional heterogeneity, so we can assume that geographical factors have a significant impact on the pace of economic growth in Russian regions. Therefore the article is focused on the following issues: 1) correlation between comparative advantages of geographical location and differences in growth rates; 2) impact of more developed regions on their neighbors and 3) correlation between economic growth of regions and their spatial interaction. The article is devoted to the empirical analysis of regional per capita incomes from 1996 to 2012 and explores the dynamics of the spatial autocorrelation of regional development indicator. It is shown that there is a problem of measuring the intensity of spatial dependence: factor value of Moran’s index varies greatly depending on the choice of the matrix of distances. In addition, with the help of spatial econometrics the author tests the following hypotheses: 1) there is convergence between regions for a specified period; 2) the process of beta convergence is explained by the spatial arrangement of regions and 3) there is positive impact of market size on regional growth. The author empirically confirmed all three hypotheses