Title: Modelling of a regional industry specialisation: the impact of agglomeration economies on labour productivity

Authors: Angi Skhvediani; Sergey Sosnovskikh; Tatiana Kudryavtseva; Stella Nalwanga

Addresses: Graduate School of Industrial Economics, Institute of Industrial Management, Economics and Trade Peter the Great St. Petersburg Polytechnic University, 29 Polytechnicheskaya Street, St. Petersburg, 195251, Russian Federation ' Leicester Castle Business School, De Montfort University, The Gateway, Leicester, LE1 9BH, UK ' Graduate School of Industrial Economics, Institute of Industrial Management, Economics and Trade Peter the Great St. Petersburg Polytechnic University, 29 Polytechnicheskaya Street, St. Petersburg, 195251, Russian Federation ' Department of Management and Human Resources, Coventry University London, University House, 109 –117 Middlesex Street, London, E1 7JF, UK

Abstract: Localisation economies are known to boost the regional economy and its growth potential. The emergence of these effects is due to localised knowledge flows, the closeness to markets, and the diversity of services and industries. Localisation economies have the potential to increase the productivity of firms. While many studies have been conducted at the industry or regional level, this paper adds to the existing literature by investigating the impact of agglomeration economies on labour productivity with the case of Russian regions during the period 2009-2018. Our findings suggest contradicting results toward existing studies. We have found a negative impact of externalities on labour productivity. This is due to Russian business and economic peculiarities and institutional factors, such as disrupted territorial-industrial complexes, uncompetitive industries, underdeveloped infrastructure, and a lack of state funding.

Keywords: agglomeration effect; government; industrialisation; industrial cluster; innovation; investment; labour productivity; localisation economy; manufacturing sector; regional economy; Russia.

DOI: 10.1504/IJTGM.2024.138992

International Journal of Trade and Global Markets, 2024 Vol.19 No.3/4, pp.215 - 242

Received: 10 Mar 2021
Accepted: 08 Nov 2021
Published online: 07 Jun 2024 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article