Economic performance of Russian regions’ capital cities

ABSTRACT Estimates of the gross urban product (GUP), GUP per capita and GUP growth rates are compared with the level and evolution of gross domestic product (GDP) and gross regional product (GRP) to examine relationships between the structure of urban economies and economic development. Agglomeration economies are manifested in the largest capital cities of Russian regions, but the benefits differ significantly between capital cities since they depend on economic structure and efficiency. A test of the hypothesis that housing construction is a driver of the economic growth of capital city economies was rejected because no causal relationship was found between housing construction and GUP in most of the cities.