The Long-Run Effects of R&D Place-Based Policies: Evidence from Russian Science Cities

We study the long-run effects of historical place-based R&D policies: the creation of Science Cities in Soviet Russia. We compare current demographic and economic characteristics of Science Cities with those of localities that were similar to them at the time of their establishment. We find that in present-day Russia, Science Cities are more innovative and productive, host more highly skilled workers, and pay them higher salaries. We interpret these findings as the result of the interaction between persistence and agglomeration forces; we rule out explanations related to the differential use of public resources. (JEL J31, J44, O33, O38, P25, R23, R58)