THE CONTRADICTORY EFFECTS OF HETEROGENEOUS MARKET POTENTIAL ON RUSSIAN URBAN DEVELOPMENT
E.A. Kolomak1,2
1Institute of Economics and Industrial Engineering, Siberian Branch of the Russian Academy of Sciences, Novosibirsk, Russia
2Novosibirsk National Research State University, Novosibirsk, Russia
Keywords: urban system, market potential, Russia, empirical analysis
Abstract
This paper examines the development of Russia’s urban system from 1991 to 2020 and explores the impact of external and internal factors on urban growth. Our methods of analysis include descriptive statistics and regression equations for the dependence of city size and urban growth rates on internal and external development resources. The analysis shows no rapid increase in urban population or skyrocketing growth of the largest cities in Russia. The paper proposes and tests the hypothesis that, due to how controversial the impact of agglomeration factors on urban growth is, weak changes in the urban system are consistent with the presence of and are resulting from market mechanisms. The indicator of market potential, which acts as an integral characteristic of the capacity and availability of external markets, is used as a measure of market size and the possibility of agglomeration effects. We distinguish three types of external markets: 1) cities within the home region; 2) rural settlements in the home region; and 3) other constituent entities of the Russian Federation. Econometric evaluations have shown different components of market potential to contribute oppositely. Competitive effects dominated in interaction with other areas, and interregional market potential was a negative factor for the city size and growth. The market potential of the home region was only used effectively in rural areas. Connections with markets of cities within the region were less significant, which further reduced the sources of development. In addition to external markets, the level of specialization, availability of housing, and social infrastructure were all significant factors for the city growth. The obtained results argue for the government support of initiatives and institutions of interregional and intermunicipal cooperation, economic and technological partnerships between cities and regions, projects of wide scope across several territories, as well as institutions and organizational mechanisms to manage them.
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