TERRA ECONOMICUS, , Vol. 17 (no. 2),

The paper proposes the use of expanded Mankiw ‒ Romer ‒ Weil model of economic growth (MRW), which includes additionally intellectual, social, infrastructure and integration capital. Based on regression modeling using panel data for 2011–2016, the importance of the digital infrastructure for the economic growth of Russian regions is justified. The indicators of the so-called digital infrastructure capital, which includes the degree of penetration of access to broadband Internet, the intensity of the use of server equipment and local computer networks in regional enterprises, are significant in the models built. In addition, the hypothesis was confirmed on the existence of permanent elasticities of the gross regional product and gross regional product per capita for the above-mentioned indicators of the digital infrastructure. As a result of adding digital infrastructure capital variables to the model, there is a transition from the production function with constant return to scale (constant return to scale) to the production function with increasing return. In addition, the total contribution of digital infrastructure indicators, estimated by the sum of their elasticities, is half of the contribution of traditional factors ‒ labor and physical capital. Also, most of the differences in gross regional product per capita and in the regions of Russia are determined by indicators of digital infrastructure. This fact clearly demonstrates the prospects and importance of digital transformation in Russia. It is worth noting that the mobile Internet, which is one of the important attributes of the digital economy development, as well as a condition for the development of modern forms of social capital, has been increasing its influence over time.
Citation: Kramin, T. V., and Klimanova, A. R. (2019). Development of digital infrastructure in the Russian regions. Terra Economicus, 17(2), 60–76. DOI: 10.23683/20736606-2019-17-2-60-76

Keywords: regional economy; economic growth; digital transformation; digital economy; Cobb ‒ Douglas function; gross regional product; social capital; infrastructural capital

  • Aghion, P. & Howitt, P. (1992). A Model of Growth through Creative Destruction. Econometrica, 60(22), 323–351.
  • Aschauer, D. A. (1989). Is public expenditure productive? Journal of monetary economics, 23(2), 177–200.
  • Barro, R. J. (1991). Economic growth in a cross section of countries. The quarterly journal of economics, 106(2), 407–443.
  • Bloom, N., & Van Reenen, J. (2007). Measuring and explaining management practices across firms and countries. The Quarterly Journal of Economics, 122(4), 1351–1408.
  • Bresnahan, T. F., Brynjolfsson, E., & Hitt, L. M. (2002). Information technology, workplace organization, and the demand for skilled labor: firm-level evidence. The Quarterly Journal of Economics, 117(1), 339–376.
  • Brynjolfsson, E., & Hitt, L. (1996). Paradox lost? Firm-level evidence on the returns to information systems spending. Management science, 42(4), 541–558.
  • Castaldo, A., Fiorini, A., & Maggi, B. (2018). Measuring (in a time of crisis) the impact of broadband connections on economic growth: an OECD panel analysis. Applied Economics, 50(8), 838–854.
  • Costa, J. S., Ellson, R. W., & Martin, R. C. (1987). Public capital, regional output, and development: some empirical evidence. Journal of Regional Science, 27(3), 419–437.
  • Crandall, R., Lehr, W., & Litan, R. (2007). The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data. Issues in Economic Policy, (6), The Brookings Institution.
  • Czernich, N., Falck, O., Kretschmer, T., & Woessmann, L. (2011). Broadband Infrastructure and Economic Growth. The Economic Journal, 121(5), 505–532.
  • Datta, A., & Agarwal, S. (2004). Telecommunications and economic growth: a panel data approach. Applied Economics, 36(15), 1649–1654.
  • De Long, J. B., & Shleifer, A. (1993). Princes and Merchants: City Growth before the Industrial Revolution. Journal of Law and Economics, 36(2), 671–702.
  • Dollar, D., & Kraay, A. (2003). Institutions, Trade and Growth. Journal of Monetary Economics, 50(1), 133–162.
  • Easterly, W., & Levine, R. (2003). Tropics, Germs, and Crops: How Endowments Influence Economic Development. Journal of Monetary Economics, 50(1), 3–39.
  • Fischer, M. M. (2014). Handbook of regional science. Heidelberg: Springer.
  • Garcia-Mila, T., & McGuire, T. J. (1992). The contribution of publicly provided inputs to statesʼ economies. Regional Science and Urban Economics, 22(2), 229–241.
  • Gera, S., Gu, W., & Lee, F. C. (1999). Information technology and labour productivity growth: an empirical analysis for Canada and the United States. The Canadian Journal of Economics/Revue canadienne dʼEconomique, 32(2), 384–407.
  • Gillett, S. E., Lehr, W. H., Osorio, C. A., & Sirbu, M. A. (2006). Measuring Broadbandʼs Economic Impact. Final Report Prepared for the US Department of Commerce, Economic Development Administration National Technical Assistance, Training. Research, and Evaluation Project, pp. 99–07.
  • Glaeser, E. L. et al. (2004) Do institutions cause growth? Journal of Economic Growth, 9(3), 271–303.
  • Gramlich, E. M. (1994). Infrastructure investment: A review essay. Journal of Economic Literature, 32(3), 1176–1196.
  • Greenana, N., & Mairesse, J. (2000). Computers and productivity in France: some evidence. Economics of Innovation and New Technology, 9(3), 275–315.
  • Holt, L., & Jamison, M. (2009). Broadband and contributions to economic growth: Lessons from the US experience. Telecommunications Policy, 33(10–11), 575–581.
  • International Telecommunication Unit (2011). Measuring the Information Society. ITU, Switzerland.
  • Ishise, Hirokazu, & Sawada, Yasuyuki. (2009). Aggregate returns to social capital: Estimates based on the augmented augmented-Solow model. Journal of Macroeconomics, 31(3), 376–393.
  • Jorgenson, D. W., Ho, M. S., & Stiroh, K. J. (2003). Growth of US industries and investments in information technology and higher education. Economic Systems Research, 15(3), 279–325.
  • Knack, S., & Keefer, P. (1995). Institutions and Economic Performance: Cross-Country Tests Using Alternative Measures. Economics and Politics, 7(3), 207–227.
  • Kolomak, E. A. (2011). The effectiveness of infrastructure capital in Russia. Journal of the New Economic Association, 10(10), 74–93. (In Russian.)
  • Komarova, A. V., & Pavshok, O. V. (2007). Estimation of the contribution of human capital to the economic growth of the regions of Russia (based on the Manqui – Romer – Weil model). Bulletin of Novosibirsk State University. Series: Socio-Economic Sciences, 7(3), 191–201. (In Russian.)
  • Kramin, T. V., Grigoriev, R. A., Timiryasova, A. V., & Vorontsova, L. V. (2016). The contribution of intellectual and social capital to the economic growth of the regions of the Russian Federation. Actual Problems of Economics and Law, 10(4), 66–76. (In Russian.)
  • Lau, S. H. P., & Sin, C. Y. (1997). Public infrastructure and economic growth: time-series properties and evidence. Economic Record, 73(221), 125–135.
  • Lehr, W., & Lichtenberg, F. R. (1998). Computer use and productivity growth in US federal government agencies, 1987–92. The Journal of Industrial Economics, 46(2), 257–279.
  • Mankiw, G.N., Romer, D., & Weil D.N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2), 407–437.
  • McGuckin, R. H., & Stiroh, K. J. (2002). Computers and productivity: are aggregation effects important? Economic Inquiry, 40(1), 42–59.
  • Mera, K. (1973). II. Regional production functions and social overhead capital: An analysis of the Japanese case. Regional and Urban Economics, 3(2), 157–185.
  • Munnell, A. H. (1992). Policy watch: infrastructure investment and economic growth. Journal of Economic Perspectives, 6(4), 189–198.
  • Nelson, R. R., & Phelps, E. S. (1966). Investment in Humans, Technological Diffusion, and Economic Growth. The American Economic Review, 56(1/2), 69–75.
  • Niebel, T. (2018). ICT and economic growth – сomparing developing, emerging and developed countries. World Development, 104, 197–211.
  • Nipo, D. T., Bujang, I., & Hassan, H. (2018). Global Digital Divide: Inter-regional Study on the Impact of ICT Diffusion on Economic Growth, pp. 209–220 / In: Proceedings of the 2nd Advances in Business Research International Conference. Springer, Singapore.
  • Nonneman, W., & Vanhoudt, P. (1996). A further augmentation of the Solow model and the empirics of economic growth for OECD countries. The Quarterly Journal of Economics, 111(3), 943–953.
  • North, D. C. (1990). Institutions, Institutional Change, and Economic Performance. Cambridge: Cambridge University Press.
  • OECD (2009). The Role of Communication Infrastructure Investment in Economic Recovery. Working Party on Communication Infrastructures and Services Policy, Organization for Economic Cooperation and Development, May.
  • Pradhan, R. P., Mallik, G., & Bagchi, T. P. (2018). Information communication technology (ICT) infrastructure and economic growth: A causality evinced by cross-country panel data. IIMB Management Review, 30(1), 91–103.
  • Quan-Haase, A., & Wellman, B. (2004). How does the Internet affect social capital? 113–135 / In: Huysman, M., & Wulf, V. (Eds.) Social capital and information technology. Cambridge, MA: MIT Press.
  • Roller, L. H., & Waverman, L. (2001). Telecommunications infrastructure and economic development: A simultaneous approach. American Economic Review, 91(4), 909–923.
  • Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), part 2, S71–S102.
  • Sala-i-Martin, X., Doppelhofer, G., & Miller, R. I. (2004). Determinants of long-term growth: A Bayesian averaging of classical estimates (BACE) approach. American Economic Review, 94(4), 813–835.
  • Sala-i-Martin, X., Doppelhoffer, G., and Miller, R. (2001). Cross-Sectional Growth Regressions: Robustness and Bayesian Model Averaging. Columbia University. Mimeographed.
  • Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, 70(1), 65–94.
  • Stewart, T. A. (2015). Intellectual Capital Business Essential. Bloomsbury Publishing, 704 p.
  • Stryszowski, P. (2012). The Impact of Internet in OECD Countries. OECD Digital Economy Papers, 200. Organization for Economic Cooperation and Development, June.
  • Swan, T. W. (1956). Economic growth and capital accumulation. Economic record, 32(2), 334–361.
  • Timiryasov, A. V., Kramin, T. V., & Kramin, M. V. (2014). Quantitative assessment of the influence of factors of international competitiveness of the regions of Russia. Actual Problems of Economics and Law, 29(1), 156–165. (In Russian.)
  • Wellman, B., Haase, A. Q., Witte, J., & Hampton, K. (2001). Does the Internet increase, decrease, or supplement social capital? Social networks, participation, and community commitment. American behavioral scientist, 45(3), 436–455.
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606