Analysis of the Impact of Infrustructure on the Development Level of Russian Regions

Abstract

Infrastructure is one of the main determinants of consistent and sustainable development in different countries and regions. Considering the Russian Federation, where there are 85 regions, not counting the federal cities, the problem of regional development and factors that can promote it, is currently of high importance. Different levels of regional development lead to higher economic differentiation between regions and cause serious damage to the Russian economy. Our main hypothesis suggests that a higher level of infrastructure development in a region positively affects economic development in the areas. Therefore, the main aim of our research is to estimate the impact of infrastructure on economic development in Russian regions using econometric analysis. In addition, cluster analysis was implemented to reveal the difference in infrastructural development levels in the regions. To provide a precise estimation, a database was constructed on Russian regions for the period of 2012 to 2016. The main method used in the research is econometric analysis and cluster analysis by using k-means method based on three main indicators: social, industrial and financial. The results of the analysis reveal 5 different clusters with highly differentiated levels of infrastructural development. Econometric analysis has shown that the most significant infrastructural factors are industrial factors and social factors. The results of the research could be taken into consideration as recommendations for development in order to improve government policy towards less developed Russian regions.