Urban agglomeration effects and company productivity in Russia: Empirical Evidence Based on Manufacturing Industry Survey

Abstract

The paper presents the results of the empirical study of location effects in the Russian manufacturing industry. Agglomerations effects are understood as productivity and other performance advantages gained by companies through co-location in the areas of geographical concentration of industries and markets. The study is based on manufacturing industry survey data (1000 companies in 49 regions and 8 sectors). The main finding is the quantitative importance of agglomeration externalities. We proved that large cities, urban scale and diversity can be an important source of economic growth for the neighboring towns.