Andrei Ilin

Abstract

The paper studies the effect of Moscow’s government street renovation program on small private businesses. I collect data on the number of small businesses (shops, pharmacies, restaurants and other amenities) opened and closed on the streets in the central district of Moscow from 2012 to 2019. I supplement those with data on timing of the renovation of each street from the official sources. Using a difference-in-difference estimation, I found strong positive effects of street renovation on the small business openings – on average, two additional businesses per kilometer of the street open up after the renovation. The positive effect increases over time. The results highlight the importance of public investment in urban infrastructure to stimulate the growth of private businesses. Further work is needed to assess the economic efficiency of improving public spaces using cost-benefit analysis, and modeling the impact of public space renovation on other socio-economic indicators.