The industrial geography of Eurasia in the 20th century: Soviet planners meet Tsarist fundamentals

How responsive is the location of economic activity to shocks? This paper uses a new data set on the location of factories in the Russian Empire (1890, 1908) and the Soviet Union (1989), supported by modern nightlight data, to explore the forces determining the spatial location of industrial production in Eurasia over the long twentieth century. Over this period, the region experienced a radical shift in its economic system from market to central planning and back again. Production was also subjected to various shocks, including war and the associated relocation of firms, forced population movement, and infrastructure investments. We assess to what extent these shocks changed the role of agglomeration effects, local labour inputs and market access in determining industry location. We find that shocks to labour fundamentals shifted the economy to new spatial equilibria. Nonetheless, the shifts were small in magnitude and these forces were not powerful enough to eradicate the path-dependent effects of Tsarist locations that were still evident in the industrial structure of the region even a century later. These results suggest the impact of even severe shocks to a spatial equilibrium to be modest at the aggregate level.