Assessing the Role of Large Cities and Agglomerations in the Russian Urban System (case study of housing market)
E.A. Kolomak1,2, A.O. Nezavitina1
1Novosibirsk National Research State University, Novosibirsk, Russia
2Institute of Economics and Industrial Engineering, Siberian Branch of the Russian Academy of Sciences, Novosibirsk, Russia
Keywords: city, agglomeration, urban system, externalities, housing market, market potential, Russia, empirical analysis
Abstract
A question of whether large cities make a positive impact on the balanced development of Russian territories remains open to debate. This article aims to assess the role of large cities and urban agglomerations in the development of the Russian urban system. Using housing prices as an indirect indicator of economic activity, we study how neighboring large cities and the fact of being included in an agglomeration affect the housing market of small and medium-sized cities in Russia. The main tested hypotheses of the analysis are the following: 1) agglomerations have a positive impact on the small cities that are part of them; 2) large cities have a positive impact on their neighboring territories; 3) the influence of a large city is determined by the size of its market and distance to it. We have chosen empirical and regression estimates to be the methods. The analysis results confirm the prevalent positive externalities of both large city's influence and inclusion in an urban agglomeration affecting small cities. The importance of the institutional component associated with the agglomeration status is comparable to the role of the market component formed due to cooperative relations between producers and consumers of the agglomeration center and small cities in a region. In Russia, taking advantage of urban system capabilities requires political decisions, including recognizing agglomeration status and removing barriers to inter-municipal interactions.
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