Between Freedom and Energy
Edited By Galina Michaleva and Andrey Ryabov
Natalia Zubarevich - Regional Development and Big Businessin Russia’s Regions - 117
Natalia Zubarevich Regional Development and Big Business in Russia’s Regions Regional development and big business are two different topics but in Russia they are closely linked with each other. The reason for that is that the dominating inﬂuence of ﬁrst nature factors (raw natural resources) persists and the role of second nature factors – ones that have an agglomeration effect (economics of scale) and use human capital – are not adequately developed. This classiﬁcation of factors, proposed as the New Economic Geography,1 helps us understand the role of big business in the process of regional development. The production and reﬁning of mineral resources is controlled by large companies, both state and private. The taxes paid by these compa- nies make up the bulk of the regional budget surplus; additionally the companies, especially oil and gas companies, are often the main investors of the region. Besides tax money, business usually ends up ﬁnancing social functions and programs in the regions. The social responsibility of these businesses is especially high in monofunc- tional towns where the company’s main resources are located. Thus we see that big business plays a huge role in the economic and social development of the regions. In this article the author tries to answer the following questions: – How are Russia’s regions and cities developing and how does big business inﬂuences this process? – How did the geography of big business change – what are the zones of expansion? – How do relations between big business and the regions’...
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