Systematisation of factors behind the agglomeration effect

Urban agglomerations are increasing their role in Russia and across the world’s econo mies, and understanding of the factors behind the effect of these settlement systems is essential for their efficient management. The paper studies the essence of agglomeration and the effects generated by its functioning on the basis of the literature review with respect to identifying, describing, grouping and typifying the factors of agglomeration economies. Spatial econom ics constitutes the methodological basis of the research; the author applies methods of analysis, synthesis, grouping, and classification. The author presents own definition of agglomeration synthesised allowing for the two main attributes of this phenomenon: concentration and inter action; suggests a classification of factors behind the agglomeration effect that include locali sation, urbanisation, settlement and deagglomeration effects, economies of scale, institutional factors. For the economies of scale, localisation and urbanisation effects the author constructs a typology consisting of 25 factors, which may underlie further quantitative research. The auhtor decomposes urbanisation effect into three subgroups: the impact of the economic development, diversification, population quantity and quality. Such characteristic reflects the complex com position of this effect and helps to avoid excessive simplification during its measurement. The researcher proposes a new group of factors, which takes into account the influence of the set tlement system. The results can become a theoretical basis for further practical research into the decision-making on enhancing the competitiveness of firms, industries, and economy in general and be useful for quantitative measurements of agglomeration effect and goal setting for the development of agglomeration system.