Having identified the main infrastructural facilities that affect regional development, through regression analysis, the author evaluates their impact on regional gross domestic products. The author proposes a method for assessing infrastructural impacts on the standard of living through least squares. Since it has become necessary to address the problem of endogeneity caused by investments in infrastructure, an attempt is made to find instrumental variables and estimate it in two-step least squares. Thus, investments in transport infrastructure are reported to provide the greatest economic effect on regions in their early stages, while in the intermediate stage – investments in electricity and telecommunications. For developed regions, however, investing in education and “green” technology is likely to be the best possible solution. The problem of endogeneity is a very complex issue and it can be quite difficult to find instrumental variables. An exogenous variable must be valid and relevant. Pertaining to investment, mortality, life expectancy, road density, fatal road accidents, and migration are proposed as instrumental variables. Indeed, would anyone want to invest in a region, if people died there abundantly, would not live for long, would leave the region and there would be no roads and no new houses would be built. There are some guidelines proposed for building up those infrastructural elements that would contribute more heavily to the gross regional product and promote economic well-being.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
About this article
31 March 2022
Print ISBN (optional)
Cite this article as:
Serkova, A. (2022). Infrastructure In The Context Of Regional Development In Russia. In & I. Savchenko (Ed.), Freedom and Responsibility in Pivotal Times, vol 125. European Proceedings of Social and Behavioural Sciences (pp. 29-37). European Publisher. https://doi.org/10.15405/epsbs.2022.03.4