SFeDu
of.211, Gorgoko St., 88 
Rostov-on-Don
Russia
344002
+7 (863) 250-59-54
This email address is being protected from spambots. You need JavaScript enabled to view it.
te@sfedu.ru

TERRA ECONOMICUS

The impact of digital infrastructure on regional development in Russia


TERRA ECONOMICUS, , Vol. 22 (no. 3),

This study contributes to the empirical literature assessing the relationship between the development of digital infrastructure and economic growth. We estimate the impact of digital infrastructure on economic growth in the regions of Russia based on Robert Solow’s extended model of economic growth. We rely on official statistics on 81 Russian regions provided by Rosstat from 2010 to 2020. Our model supports the hypothesis that broadband Internet access has a positive impact on the regional economy. In particular, estimated gross regional product elasticity by broadband penetration in the corporate sector is 0.38. Estimations are positive and statistically significant. To tackle the endogeneity problem, we use Granger-causality tests which enables us applying panel least squares regression with time fixed effects excluded. Our findings confirm the importance of broadband Internet penetration for regional economic growth, and thereby provide substantiation for related regional policies in the Russian Federation.
Citation: Kramin T.V., Imasheva I.Yu. (2024). The impact of digital infrastructure on regional development in Russia. Terra Economicus 22(3), 115–127 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-115-127


Keywords: digital infrastructure; economic growth; regional economy; extended Solow model; broadband access; Internet

JEL codes: O18, R11

References:
  • Волкова Н.Н., Романюк Э.И. (2020). Взаимосвязь уровня развития цифровой среды и производительности труда. Проблемы развития территории (4), 109–123. [Volkova, N., Romanyuk, E. (2020). The relationship between the level of development of the digital environment and labor productivity. Problems of Territory Development (4), 109–123 (in Russian)]. DOI: 10.15838/ptd.2020.4.108.7
  • Имашева И.Ю. (2022). Специфика развития широкополосного интернета в России. Экономика, предпринимательство и право 12(10), 2835–2850. [Imasheva, I. (2022). Specifics of broadband Internet development in Russia. Economics, Entrepreneurship and Law 12(10), 2835–2850 (in Russian)]. DOI: 10.18334/epp.12.10.116373
  • Имашева И.Ю., Крамин Т.В. (2022). Цифровое неравенство: модернизация кривой Кузнеца в цифровую эпоху. Russian Journal of Economics and Law 16(4), 716–727. [Imasheva, I., Kramin, T. (2022). The digital divide: Modernizing the Kuznets curve for the digital age. Russian Journal of Economics and Law 16(4), 716–727 (in Russian)]. DOI: 10.21202/2782-2923.2022.4.716-727
  • Макаркин Н.П., Горина А.П., Алферина О.Н., Корнеева Н.В. (2020). Цифровизация бизнеса в условиях пандемии. Вестник Алтайской академии экономики и права (11) (часть 1), 80–85. [Makarkin, N., Gorina, A., Alferina, O., Korneeva, N. (2020). Digitalization of business in a pandemic. Bulletin of the Altai Academy of Economics and Law (11), part 1, 80–85 (in Russian)]. DOI: 10.17513/vaael.1397
  • Мамедьяров З.А. (2021). Ускорение цифровизации на фоне пандемии: мировой опыт и Россия. Контуры глобальных трансформаций: политика, экономика, право 14(4), 92–108. [Mamedyarov, Z. (2021). Accelerating digitalization against the backdrop of a pandemic: Global experience and Russia. Contours of global transformations: Politics, Economics, Law 14(4), 92– 108 (in Russian)]. DOI: 10.23932/2542-0240-2021-14-4-6
  • Пономарева Е.А. (2021). Цифровизация экономики как движущая сила экономического роста: только ли инфраструктура имеет значение? Журнал Новой экономической ассоциации (3), 51–68. [Ponomareva, E. (2021). Digitalization of the economy as a driving force of economic growth: Is it only infrastructure that matters? Journal of the New Economic Association (3), 51– 68 (in Russian)]. DOI: 10.31737/2221-2264-2021-51-3-3
  • Amirov, L., Avazov, N. (2022). The impact of digital infrastructure, foreign direct investment and trade openness on economic growth: The case of Uzbekistan. In: International Conference on Next Generation Wired/Wireless Networking. Cham: Springer Nature Switzerland, pp. 322–332.
  • Aschauer, D. (1989a). Is public expenditure productive? Journal of Monetary Economics 23(2), 177–200.
  • Aschauer, D. (1989b). Public investment and productivity growth in the Group of Seven. Economic Perspectives 13(5), 17–25.
  • Aschauer, D. (1989c). Does public capital crowd out private capital? Journal of Monetary Economics 24(2), 171–188.
  • Atif, S., Endres, J., Macdonald, J. (2012). Broadband infrastructure and economic growth: A panel data analysis of OECD countries. SSRN Working paper № 2166167. DOI: 10.2139/ssrn.2166167
  • Choi, C., Yi, M. (2009). The effect of the Internet on economic growth: Evidence from cross-country. Economics Letters 105, 39–41.
  • Cieslik, A., Kaniewska, M. (2004). Telecommunications infrastructure and regional economic development: The case of Poland. Regional Studies 38, 713–725.
  • Czernich, N., Falck, O., Kretschmer, T., Woessmann, L. (2011). Broadband infrastructure and economic growth. The Economic Journal 121(552), 505–532.
  • Dimelis, S., Papaioannou, S. (2010). FDI and ICT effects on productivity growth: A comparative analysis of developing and developed countries. European Journal of Development Research 22(1), 79–96.
  • Farhadi, M., Ismail, R., Fooladi, M. (2012). Information and communication technology use and economic growth. PLoS ONE 7, e48903.
  • Frieden, R. (2023). Best practices in promoting widespread and affordable broadband service after the Covid-19 pandemic. SSRN Working Paper № 4628562. http://dx.doi.org/10.2139/ssrn.4628562
  • Guo, Q., Geng, C., Yao, N., Zhao, L. (2024). Can digital infrastructure enhance economic efficiency? Evidence from China. Quality & Quantity 58(2), 1729–1752.
  • Kabaklarli, E., Atasoy, B. (2019). Broadband infrastructure and economic growth: a panel data approach for selected countries. In: DIEM: Dubrovnik International Economic Meeting 4(1), 105–114.
  • Kroll, K. (2023). COVID-19 and broadband internet: Historic government funding in the wake of a global pandemic poised to bridge the digital divide. Duquesne Law Review 61, 283.
  • Latif, Z., Latif, S., Ximei, L., Pathan, Z., Salam, S., Jianqiu, Z. (2018). The dynamics of ICT, foreign direct investment, globalization and economic growth: Panel estimation robust to heterogeneity and cross-sectional dependence. Telematics and Informatics 35, 318–328.
  • Lovric, L. (2012). Information-communication technology impact on labor productivity growth of EU developing countries. Zbornik radova Ekonomskog fakulteta u Rijeci, časopis za ekonomsku teoriju i praksu – Proceedings of Rijeka Faculty of Economics, Journal of Economics and Business 30(2), 223–245.
  • Maciulyte-Sniukiene, A., Butkus, M. (2022). Does infrastructure development contribute to EU countries’ economic growth? Sustainability 14(9), 5610.
  • Majeed, M., Ayub, T. (2018). Information and communication technology (ICT) and economic growth nexus: A comparative global analysis. Pakistan Journal of Commerce and Social Sciences 12, 443–476.
  • Makkar, S., Rajpal, A. (2023). Impact of digital infrastructure on Indian economic growth. Indian Journal of Industrial Relations 59(1), 47.
  • Meijers, H. (2014). Does the Internet generate economic growth, international trade, or both? International Economics and Economic Policy 11,137–163.
  • Myovella, G., Karacuka, M., Haucap, J. (2020). Digitalization and economic growth: A comparative analysis of Sub-Saharan Africa and OECD economies. Telecommunications Policy 44(2), 101856.
  • Najarzadeh, R., Rahimzadeh, F., Reed, M. (2014). Does the Internet increase labor productivity? Evidence from a cross-country dynamic panel. Journal of Policy Modeling 36, 986–993.
  • Nasab, E., Aghaei, M. (2009). The effect of ICT on economic growth: Further evidence. International Bulletin of Business Administration 5, 46–56.
  • Nchake, M., Shuaibu, M. (2022). Investment in ICT infrastructure and inclusive growth in Africa. Scientific African 17, e01293.
  • Niebel, T. (2018). ICT and economic growth-Comparing developing, emerging and developed countries. World Development 104, 197–211.
  • Pradhan, R., Mallik, G., Bagchi, T. (2018). Information communication technology (ICT) infrastructure and economic growth: A causality evinced by cross-country panel data. IIMB Management Review 30(1), 91–103.
  • Tang, J., Zhao, X. (2023). Does the new digital infrastructure improve total factor productivity? Bulletin of Economic Research 75(4), 895–916.
  • Thompson, H., Garbacz, C. (2011). Economic impacts of mobile versus fixed broadband. Telecommunications Policy 35, 999–1009.
  • Timilsina, G., Hochman, G., Song, Z. (2020). Infrastructure, economic growth, and poverty: A review. World Bank Policy Research Working Paper № 9258. World Bank, Washington, DC. http://hdl. handle.net/10986/33821
  • Toader, E., Firtescu, B., Roman, A., Anton, S. (2018). Impact of information and communication technology infrastructure on economic growth: An empirical assessment for the EU countries. Sustainability 10(10), 3750.
  • Veeramacheneni, B., Ekanayake, E., Vogel, R. (2011). Information technology and economic growth: A causal analysis. Southwestern Economic Review 34, 75–88.
  • Yousefi, A. (2011). The impact of information and communication technology on economic growth: Evidence from developed and developing countries. Economics of Innovation and New Technology 20(6), 581–596.
  • Zagorchev, A., Vasconcellos, G., Bae, Y. (2011). Financial development, technology, growth and performance: Evidence from the accession to the EU. Journal of International Financial Markets, Institutions and Money 21, 743–759.
  • Zhou, A. (2022). Digital infrastructure and economic growth – Evidence for China. Journal of Infrastructure, Policy and Development 6(1), 1397.
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606