Economy of Regions

Industrial Production Dynamics of Regions: Assessment of the Resilience of Responses to External Constraints

Irina V. Danilova — 2024-09-30

The Russian economy is at the centre of destabilising events. The article assesses the resilience of responses of industrial production to external constraints. Long – and short-term regional responses were examined using the methods of estimation of trend and cyclical components of production volume changes, construction of phase dynamics models (sectoral and cross-sectoral tracers) of relevant and prospective specialisation areas, assessment of the resilience of industrial regions based on the indicators of long-term, short-term and prospective dynamics. Analysis of particular resilience indicators demonstrated regional differences in production indices before and after destabilising events, duration of the recovery period, degree of reaching the pre-shock level, presence or absence of stabilising industries, etc. Three levels of production resilience were distinguished: elastic response characterises regions that managed to reach the pre-shock level; super-elastic response indicates compensatory recovery and positive post-shock growth; plastic response means negative consequences after the normalisation of events. The paper analysed export-oriented single-industry metallurgical regions using official statistics on industrial production indices for 2006–2021. As a result, their resilience profiles were differentiated: the research noted a negative impact and slowdown in economic growth in Chelyabinsk and Sverdlovsk oblasts, as well as a positive reaction in Vologda and Lipetsk oblasts. Additionally, it was revealed that stabilising industries with counter-phase dynamics are present in Vologda and Lipetsk oblasts and absent in Sverdlovsk and Chelyabinsk oblasts. According on the identified levels of production resilience, targets and tools of regional industrial policy were determined. Regions with plastic responses to external constraints require support for prospective specialisations. In regions with elastic and super-elastic responses, it is necessary to implement strategies and policy measures for the stabilisation of development through economic diversification.

Formation and Assessment of the Development Potential of Preferential Territories in Russia

Olga A. Romanova — 2024-09-30

Considering the new reality in Russia, research needs to identify and use additional factors to ensure economic growth. The spatial factor plays an important role in enhancing the sustainability of economic development and increasing macroeconomic dynamics. The study examines the formation and assesses the development potential of Russian preferential territories, of which there are currently more than 860. The research methodology is based on the principles of spatial development, synergetic economics and institutional theories. Methods of comparative, statistical, structural, and SWOT analysis are used. It is hypothesised that the use of the development potential of preferential territories (in this case, priority development areas (PDAs) of single-industry towns) will increase their technological advancement. As of 2024, 110 Russian territories, including 84 single-industry towns, have the priority development area status. The opportunities and development risks of Russian preferential territories were analysed using SWOT. An institutional-synergetic approach to the formation of PDAs was utilised to create a methodology for determining development potentials. The performed assessment of the potential of 9 priority development areas in single-industry towns revealed the presence of technologically advanced institutions only in three of them (Naberezhnye Chelny, Tolyatti and Nevinnomyssk). Six PDAs have resources, development institutions, and infrastructure corresponding to the current technological development level of the territory. Three PDAs can rely on the strategic potential of their regions (characterised by a high or average quality of life and investment attractiveness). The study offered recommendations for adjusting territorial development strategies, taking into account the socio-economic potential of priority areas for their transition to the next technological level. The findings can be used for updating the Spatial Development Strategy of the Russian Federation and adjusting the performance indicators of preferential territories.

Spatial Analysis of Infrastructure Effects of Economic Dynamics in Russian Regions

Olga Yu. Patrakeeva — 2024-09-30

Sustainable development of the transport system ensures the economic space unity, integrity and national security. The study hypothesises that infrastructure as an essential factor of well-being brings economic benefits to a region and determines its socio-economic growth, with effects extending beyond the region itself. Econometric and geoinformation methods were combined to conduct a spatial analysis of the impact of the capital-labour ratio, transport and telecommunication infrastructure on gross regional product per capita and labour productivity in industry, as well as to assess direct and spillover effects. The estimates revealed a statistically significant positive spillover effect of the capital-labour ratio, railway and telecommunication development indices on economic development. At the same time, negative direct effects of railway infrastructure indices on industry indicate that, in conditions of concentration of economic activity, the increasing transport system load does not correspond to its physical growth rates under heavy wear. This conclusion is confirmed by a negative spillover effect of the capital-labour ratio on labour productivity in industry in two model specifications with a direct positive effect. Providing access to networks and information resources for enterprises and population, as well as increasing technological capabilities and the speed of interaction between economic entities cause positive externalities of telecommunications for economy. Telecommunication infrastructure is a factor of industrial production growth, however, its negative spillover effects show that regions surrounded by regions with high mobile penetration rate are experiencing a slowdown in labour productivity in industry. The obtained estimates and the spatial correlation between gross regional product per capita and labour productivity in industry should be considered in programmes for financing infrastructure projects.

Factors of Socio-Economic Changes in Small Towns of the Russian-Belarusian Border Area

Anton S. Kuzavko — 2024-09-30

Small towns remain an important element of the settlement framework in the Russian Federation. Socio-economic status, settlement functions and motives of residents determine the prospects for the development or degradation of small towns. The article aims to classify existing and identify new factors in the socio-economic development of small border towns. The paper examined and analysed a set of Russian and foreign publications, as well as collected statistics from small towns in the Russian-Belarusian border area. A scientific hypothesis about the influence of border factors and interstate integration on socio-economic changes in small towns of the Russian-Belarusian border area was tested. As a result, new functions and socio-economic factors of small border towns were identified. The border position of a small town can be a development factor if the barrier of the interstate border remains. It was established that the population decline in small towns of the Russian-Belarusian border area is greater in comparison with its regional indicators and large cities. Investments in fixed capital per capita during the analysed period, with rare exceptions, do not exceed 50 % of the region’s value. However, the number of square metres of housing per capita in small towns is higher than the regional average. A proposed supranational strategy for the development of the Russian-Belarusian border area will help stimulate the economy of small towns and improve the quality of life of the population. When strategically planning the development of small towns in the Russian-Belarusian border area, it is necessary to determine their economic functions, define a specialisation to emphasise their identity and use competitive advantages in the struggle for resources with larger agglomerations.

Assessing the Development Potential of Creative Business in Second-Tier Cities

Irina S. Antonova — 2024-09-30

By declaring 2021 the year of creative industries, Russia highlighted the importance of this sector at the national level. However, various databases and existing tools are insufficient for a comprehensive assessment of the potential of creative industries. The study aims to establish a methodology for identifying the development potential of creative business and test it on the example of second-tier cities of Siberia and the Urals. The proposed methodology defined three elements of the development potential of creative business: creative potential, capitalisation potential and commercial potential. The study presented an algorithm and a set of assessment indicators, which were integrated with the database of second-tier cities to create a practice-oriented information and analytical tool to support management decision-making in the field of creative business development in cities. Testing of the algorithm in second-tier cities of the Urals and Siberia revealed cities with high potential (having all three elements), such as Berezovsky, Verkhny Ufaley, Verkhnyaya Pyshma (Sverdlovsk oblast), Belovo, Novokuznetsk, Yurga (Kemerovo oblast), and Kopeysk (Chelyabinsk oblast); cities with medium potential (having two elements), including Alapaevsk, Asbest, Zarechny, Sredneuralsk, Myski, Mariinsk, Katav-Ivanovsk, Trekhgorny, Zlatoust, Kyshtym, Biysk, Novoaltaysk, Seversk, Surgut, Uray, Yugorsk; cities with certain elements of the development potential of creative business. In general, a weak correlation between the elements of potential and a low diversity of the creative urban environment prevent cities from capitalizing and commercializing their creative potential. The study proposed to strengthen inter-municipal, intraregional and interregional interactions, as well as to create strategic development documents for creative business. The findings can be used by local authorities and the business community to identify cities with the greatest potential for the development of creative business.

Regional Features of Russian Gazelles During the Pandemic

Dmitri A. Pletnev — 2024-09-30

In the context of global turbulence, the Russian national economy needs positive economic practices of resilience and subsequent development. This need is even greater in regional economies, where a few relatively small growth points, including high-growth firms (HGFs, ‘gazelles’), can become drivers for the entire region. The study analyses the performance of high-growing firms and their impact on regional resilience during the acute phase of the global economic crisis caused by the COVID-19 pandemic (2020–2021). A sample of 11,940 firms (including 403 HGFs) in Sverdlovsk, Vologda, Kurgan, Lipetsk, Orenburg, Chelyabinsk regions, Krasnoyarsk krai and the Republic of Bashkortostan was examined. The research uses such approaches as estimation of the shares of HGFs by number and output and assessment of correlation using the nonparametric method of Spearman’s coefficient. The share of HGFs in the sample as a whole and for each region is consistent with global trends (2-4 %). The industrial structure of high-growth firms differs across regions, meaning that HGFs manifest themselves individually in various regions. ‘Gazelles’ demonstrated a greater ability to preserve jobs during the pandemic in most regions of the sample. For example, while an average employment growth rate was 2 % in 2020, this figure was 25 % for HGFs in Krasnoyarsk krai and Sverdlovsk oblast. During economic recession, ‘gazelles’ positively affect regional resilience in such activities as transport and storage, wholesale and retail trade, and mining. The result is the opposite for manufacturing: a larger share of high-growth companies was characteristic of regions with slower output growth rates for this type of activity in 2020–2121. The findings can be used to substantiate the significance of developing and implementing government support programmes for HGFs at the federal and regional levels.

Differentiation of the Constituent Entities of the Russian Federation for the Implementation of Regional Scientific, Technological and Innovation Policy

Vladimir I. Byvshev — 2024-09-30

Scientific, technological and innovative development in Russia is becoming increasingly important at the state level. The study aims to differentiate the constituent entities of the Russian Federation to identify approaches to the implementation of a systemic regional scientific, technological and innovation policy. It is hypothesised that socio-economic, spatial, and administrative and historical factors should be considered for developing such a policy in Russian regions. Axiomatic and descriptive methods, economic and statistical analysis, and mapping were utilised. A system of 3 indicator blocks for the differentiation of Russian regions was compiled; the obtained results were presented in a table and a map. The described heterogeneities and commonalities of regions can be used to develop directions for implementing regional scientific, technological and innovation policy. Russian regions were divided into 23 groups of 4 types, ranging from most to least scientifically, technologically and innovatively developed. Corresponding recommendations for successful scientific, technological and innovative development of each type were generated. Advanced regions need to implement a policy of research leadership, guidance for other regions, and international cooperation. Developed regions have to focus on the best practices of advanced regions, develop their target scientific areas, and establish interregional research cooperation within groups to strengthen their competitive advantages. Regions with development potential should be involved in the federal scientific and technological agenda, which can become a powerful impulse and attract federal funding. Regions with a low base can cooperate with more developed regions similar in terms of economic structure and location and become their satellite. The presented differentiation of Russian regions by key characteristics and parameters confirmed the hypothesis, proving the need for consistency of regional scientific, technological and innovation policy and scientific validity of decision-making.

Aviation Pollution, Tourism, and Economic Development: A Study of the EKC Hypothesis at the Regional Level

Thanh Ngo — 2024-09-30

The study aims to revisit the relationship between aviation pollution, tourism, and economic development through the lens of the Environmental Kuznets Curve (EKC), particularly at the regional level, using New Zealand as a case study. We are the first to estimate aviation pollution at regional airports in New Zealand and use them as proxy for the regional pollution in an EKC setting. Our findings provide evidence of an EKC at New Zealand regions, indicating that tourism and economic development contribute to the long-term regional environment improvement. This highlights the necessity for environment policy to be tailored at a regional level, rather than solely at the national scale. Additionally, our research introduces a novel approach to EKC studies by incorporating new pollution estimations, which enhances the understanding of regional environmental dynamics. Among others, we discovered that that the sustainable tourism policy has, and will, work well in New Zealand. This study underscores the importance of considering regional factors in environmental policymaking and offers insights that could inform future strategies for balancing economic growth with environmental sustainability.

Impact of Fiscal Capacity on the Convergence of Income Inequality in Russian Regions

Oscar S. Gasanov — 2024-09-30

At the regional level, the issue of income inequality in Russia remains relevant. Numerous studies on this topic do not fully reflect the efforts to overcome this problem in the context of budgetary policy. Meanwhile, monetary income of the population is greatly affected by budget support measures for regions. In this regard, it is necessary to assess the impact of fiscal capacity of regional budgets on the convergence of income inequality. In particular, the study examines the convergence of income inequality among the population of the Southern Federal District (SFD) of the Russian Federation. According to the hypothesis, fiscal expenditures per capita are one of the most important factors in the convergence of incomes at the regional level. The presence of unconditional and conditional convergence of income inequality for the period 2012–2021 was tested using the least squares method. Panel data with a one-period lag were assessed. Data of the Federal State Statistics Service of Russia on income inequality (the Gini index) and implementation of regional budgets in the Southern Federal District were used for modelling. The results indicate the presence of both unconditional and conditional convergence of income inequality in regions of the Southern Federal District. Two factors of fiscal capacity of regions were used for assessing the conditional convergence: estimated fiscal capacity and specific fiscal expenditures per capita of regions. It was established that the policy of budget equalisation of incomes remains a reliable tool for overcoming inequality in Russian regions. The findings can be used to solve the problems of regional inequality, implement fiscal federalism, plan budget expenditures for federal and regional budgets, as well as inter-budget transfers.

Regional Inflation Analysis Using Social Network Data

Vassiliy S. Shcherbakov — 2024-09-30

Inflation is one of the most important macroeconomic indicators that have a great impact on the population of any country and region. Inflation is influenced by a range of factors, including inflation expectations. Many central banks take this factor into consideration while implementing monetary policy within the inflation targeting regime. Nowadays, a lot of people are active users of the Internet, especially social networks. It is hypothesised that people search, read, and discuss mainly only those issues that are of particular interest to them. It is logical to assume that the dynamics of prices may also be in the focus of users’ discussions. So, such discussions could be regarded as an alternative source of more rapid information about inflation expectations. This study is based on unstructured data from VKontakte social network used to analyse upward and downward inflationary trends (on the example of the Omsk region). The sample of more than 8.5 million posts was collected between January 2010 and May 2022. The authors used BERT neural networks to solve the problem. These models demonstrated better results than the benchmarks (e.g., logistic regression, decision tree classifier, etc.). It makes possible to define pro-inflationary and disinflationary types of keywords in different contexts and get their visualisation with SHAP method. This analysis provides additional operational information about inflationary processes at the regional level The proposed approach can be scaled for other regions. At the same time, the limitation of the work is the time and power costs for the initial training of similar models for all regions of Russia.

Regional Insurance Markets of the Russian Federation: Development Dynamics in the Post-COVID Period

Sergey A. Belozerov — 2024-09-30

The continuing interest in the insurance market of both experts in the field and ordinary citizens who need insurance services highlights the importance of analysing the impact of the COVID-19 pandemic consequences, which significantly affected the activities of insurance market participants in 2021. While the insurance market has largely overcome the negative effects of the pandemic, its consequences still influence the market’s development. The analysis of changes will help develop theoretical and practical recommendations to minimise the consequences of biological threats in the future. The study aims to assess the insurance market in the post-COVID period based on the results of insurers’ activities in 2021 by types of insurance in federal districts of the Russian Federation and to determine development dynamics, the degree of penetration and the need for insurance services in regions. To this end, official statistics were used to examine insurers’ activities by comparing and summarising metadata, considering regional characteristics of the constituent entities of the Russian Federation. It is hypothesised that while emergency conditions affect all sectors of the economy and the social sphere, the insurance market remains stable and quickly adapts to changes. The study concluded that all types of voluntary and compulsory property insurance are presented in the Russian insurance market; in comparison with the pre-COVID period, the insurance sector showed an increase of 17.46 %; a positive trend of increasing fees in almost all regions indicates an increase in the penetration of insurance services. The global events of 2022 have also seriously affected the insurance industry, thus, it can be expected that the insurance sector will undergo a significant transformation in the future.

Methodological Approach to Assessing the Impact of External Factors on Financial Risks of Retailers Considering Regional Aspects

Vladimir A. Kunin — 2024-09-30

Financial risk management in retail companies requires considering both internal and external risk factors. Contemporary researchers primarily focus on macroeconomic indicators disregarding regional aspects that might exacerbate key financial risks for multi-regional enterprises. The study aims to develop a methodological approach to assess and predict the impact of mesoeconomic factors on financial risks of retailers. Particular attention is paid to downside (profit and profitability) and structural risks. The presented approach implements the authors’ concept based on the application of correlation-regression analysis of relationship between retail trade turnover of these companies and external factors. The study employs mathematical statistics and econometric analysis. Publicly accessible official data from the Federal State Statistics Service, the Central Bank of the Russian Federation and the United Nations for 2005–2021 were analysed. The research investigates changes in profit, profitability and combined leverage (which combines financial and operating leverage) affected by external factors. The proposed methodology for assessing the impact of external factors on financial indicators revealed their heterogeneous effect on retail trade turnover depending on the region. The study introduced a novel integrated leverage metric and its analytical estimates, which quantify the impact of external factor variations on profit and profitability of retail companies. The proposed methodology and resulting estimates can be used by financial, investment and managerial decision-makers to identify external factors affecting financial risks of companies at the meso level. The study contributes theoretically by developing a methodological approach to assessing and predicting financial risks considering regional aspects.

Principles of Strategising in the Regional Agri-Food Sector: Industry Aspect

Denis Yu. Samygin — 2024-09-30

Nowadays, the agri-food sector faces a challenge to ensure sustainable consumption, meaning that it is necessary to increase the validity of the methodology for strategic planning in regional agriculture. Each region with its own strategic capabilities can contribute to the solution of this problem. The study specifies the principles of strategic planning for the development of the agri-food sector in order to intensify the use of the regions’ competitive advantages in ensuring the physical and economic accessibility of products. To this end, the research conducted a critical analysis of the Russian strategic system, a synthesis of the experience of other economies, statistical grouping and correlation analysis of the database on agricultural development and state support in constituent entities of the Russian Federation (2017–2021). The analysis revealed weaknesses of the existing theory and practice of planning, namely, the forecasting strategy «from the achieved level» of development and resource constraints in achieving the set objectives. According to the conducted research, the system of strategic planning in the agri-food sector should consider the desired state and methods for achieving it, the suitability of tools and allocation of resources, the involvement of agricultural resources and competitive advantages of producers, as well as the priority of industry development of the agricultural sector over territorial. As a result, the paper identified basic principles of the methodology for strategic planning in regional agriculture, which, on the one hand, should focus on describing the desired state of physical and economic accessibility of products, on the other hand, should determine the optimal course of action to transition to this state. The findings can be included in the key provisions of strategic planning documents for the agri-food sector.

Resource Approach to Assessing the Development Opportunities of Regional Industrial Systems

Olga A. Chernova — 2024-09-30

Currently, the development prospects of regional industrial systems are determined by a territory’s ability to fully utilise the available resource potential. However, the existing approaches to examining the industrial development potential do not take into account regional resource capacity. The article aims to assess the development opportunities of regional industrial systems, assuming that they are determined by the efficiency of utilisation of the available resource potential. To this end, the resource approach was applied. Comparative and trend analysis were used as research methods. The developed methodology was tested on the example of the Pridnestrovian Moldavian Republic (Transnistria) for the period 2014–2021 without considering the current situation in Ukraine. The conducted research demonstrated that the proposed toolkit can be used to identify factors limiting the development of regional industrial systems. Accordingly, a key limiting factor for Transnistria is fixed capital, showing a tendency to decrease the real residual value. It was concluded that regions not fully utilising their resource potential should implement investment mechanisms and measures to ensure the use of existing latent technological capabilities. The main limitation of the study is that the proposed assessment tools do not consider the demand for regional industrial products. Nevertheless, this methodology can be used to elaborate state industrial policy, providing an insight into the development prospects of regional industrial systems by comparing the actual production volume with its maximum possible with the full use of the resource potential.

Methodological Approach to the Efficiency Analysis of Regional Industrial Ecosystems

Evgenii S. Mityakov — 2024-09-30

Formation of a new model of limited open sovereign economy in Russia requires the improvement of the theoretical and methodological basis for evaluating the efficiency of regional industry. The research aims to develop a methodological approach to the efficiency analysis of regional industrial ecosystems. To this end, an ecosystem approach to analysing the efficiency of regional industry was employed. In order to establish evaluation criteria, the study defined the structure of regional industrial ecosystems, comprising a set of intrinsic characteristics (development projections): scale, production potential, production infrastructure, human capital, research and development (R&D), innovation, integration potential, competitiveness, and ecology. Efficiency evaluation and comparative analysis of regional industrial ecosystems were performed using a developed system of twenty-seven indicators to provide an objective assessment of the state of industry. The paper examined five industrially developed regions of the Volga Federal District: the Republics of Bashkortostan and Tatarstan, Perm krai, Nizhny Novgorod and Samara oblasts. Testing of the authors’ approach revealed the uneven development of regions according to projections and indicators of industrial ecosystems. Nizhny Novgorod oblast achieved the best result in terms of the totality of indicators, as well as in terms of scale and production potential, R&D and ecology. Perm krai is a leader according to such indicators as production infrastructure and product competitiveness. The Republic of Tatarstan leads in innovation, while the Republic of Bashkortostan has the greatest integration potential. Samara oblast is the outsider characterised by high depreciation of fixed assets and discharge of contaminated wastewater. The findings confirmed the research hypothesis about the possibility of representing processing industries of industrially developed Russian regions as industrial ecosystems.

Methodology for Measuring Housing Affordability

Vitaliy V. Ivanitskiy — 2024-09-30

As the basis of many social institutions, family greatly contributes to regional and national development. Housing affordability is an indicator of the standard of living in a region, which ultimately determines its ranking. The paper proposes to use the housing affordability coefficient, based mainly on the stages of creation and development of a social unit (family), which considers the influence of life circumstances (obstacles) on purchasing a house by a particular family in a particular region. This indicator includes two components: a constant of the period of savings accumulation by the family from the beginning of pregnancy until the child reaches the age of 1.5 years and the mortgage period. The housing affordability coefficient was tested on data for the Russian Federation, as well as for two regions of the Central Federal District (with the lowest and highest housing costs). The paper emphasises that the index of real estate affordability should have a specific value that can be perceived and imagined. The article provides a comparative analysis of the author’s and generally accepted in Russia methods of analysis for the period 2006–2021. A significant improvement in housing affordability was observed at the end of the examined period due to the presence and increase in maternity capital, the permission to use it as a down payment, the reduction by banks of the down payment and the mortgage rate. The author’s methodology more clearly confirmed the hypothesis that life circumstances (obstacles) greatly affect housing affordability, significantly increasing the values of the housing affordability coefficient. The findings can be used to compile a regional ranking in general and to assess the regional housing sector in particular.

Identification of Regional Sectoral Priorities Based on Key Investment Growth Points

Vladimir N. Myakshin — 2024-09-30

The relationship and mutual influence of intersectoral investment flows should be considered to improve the effectiveness of regional investment policy under financial restrictions. An analysis of studies in the field of sectoral investment priorities revealed numerous methodological problems, meaning that it is necessary to develop a new methodological approach to the establishment of investment priorities based on identifying key investment growth points. To examine and assess intersectoral investment interactions, the paper presented the concepts of mutual investment induction, mutually induced investments, key investment growth points, and developed a system of original indicators. An industry’s ability to induce investment in interrelated industries helps justify the sectoral concentration of investment resources. Based on its assessment, three classification groups of types of economic activity were distinguished: key, potential and possible in the future investment growth points. To test the proposed methodology, indicators of intersectoral investment interactions in the sectoral structure of Arkhangelsk oblast were calculated, a classification of types of economic activity was presented. Key investment growth points include five types of economic activity: “Construction”; “Wholesale and retail trade; repair of motor vehicles and motorcycles”; “Accommodation and food service activities”; “Professional, scientific and technical activities”; “Provision of other types of services”. Potential points include four types of economic activity: “Agriculture, forestry, hunting, fishing and fish farming”; “Manufacturing industries”; “Water supply; drainage, organisation of waste collection and disposal, pollution elimination activities”; “Health and social work activities”. The remaining eight types of economic activity constitute a group of growth points possible in the future. Based on the identified key and potential investment growth points, the paper distinguished priority investment areas and proposed an algorithm for regulating intersectoral investment flows.

Effects of a Customs Union on Economic Growth: Empirical Evidence from Southern African Customs Union (SACU)

Han-Sol Lee — 2024-09-30

This study analyses the effects of the Southern African Customs Union (SACU) on the economic growth of its member states based on unbalanced panel datasets. This research was inspired by the ongoing discussions about the development of “free-trade agreements” and the growing anxiety about the US dollar’s stability as a world currency. The latter has recently led to the announcement of the Brazil-Argentina currency union to make bilateral trade easier. As the SACU countries are practically using the South African Rand as a single currency, a growing interest in evaluating the SACU internal trade validity for being the foundation of similar integrative action has started to manifest. The regression results of pooled ordinary least squares (OLS), fixed effects (FE), and random effects (RE) models demonstrate that the economic growth effects of intra-trade (exports, imports) of SACU do not exist. This indicates that further economic integration may not provide positive effects for SACU. However, the most crucial factor to drive the economic growth of SACU turned out to be domestic investment. Attracting foreign direct investment (FDI) also highly contributes to the economic growth of SACU. It is natural and advisable for the member states of SACU to continue the enhancement of investment-conducive environments for domestic and foreign companies. In addition, the long-term fuelling of economic growth with government debt, government spending, and investments points to possible discrepancies in the economic structure of the union, may be connected to internal demand issues. In this sense, it would be reasonable to research the potential of expanding SACU to the countries of the Southern African Development Community (SADC).

Forecast of Socio-Economic Consequences of SARS-CoV-2 Infection and the COVID-19 Pandemic

Gilbert Mabiala — 2024-09-30

The global spread of SARS-CoV-2, the cause of COVID-19, remains a public health issue. The pandemic has resulted in approximately 563,312,528 instances of infection, endangering health and increasing the risk of unemployment and income loss for many people worldwide. The article presents a computational and graphical analysis of the effects (shocks) of SARS-CoV-2 and new variants of COVID-19 on human activity, simulates the caused socio-economic damage and forecasts the society’s socio-economic development. To this end, cases of infection, mortality and recovery in the population were analysed, forecast scenarios for the trajectory of socio-economic indicators affected by new variants of COVID-19 were substantiated. The study applied the economic and statistical method, as well as the tabular and graphical approaches to the assessment of empirical data. Analysis of the proposed quantitative model for examining the impact of the COVID-19 infection revealed the reasons for the decline in commercial activity, socio-economic stagnation and a worldwide economic recession. The pandemic-related measures have exacerbated the pre-2019 crisis, resulting in unprecedented socio-economic upheavals, an increase in global poverty from 17.1 % to 25.9 %, and an estimated damage to the world economy of more than 1,976.80 trillion roubles. Additionally, the rate of socio-economic well-being recovery have slowed from 11.8 to 6.7 months. The healthcare system will face significant challenges if the share of actively infected persons exceeds 1 %. Moreover, the 10 % infection rate will cause the malfunctioning of socio-economic infrastructure components of the world economy accompanied by macroeconomic shocks, as well as a persistent decrease in gross domestic product by 2.4 % in 2021–2022 and 4 % in 2023. This situation can exacerbate already-existing socio-economic contradictions, raise unemployment and inflation, lead to a fall in the population’s real income.

Regional Differences of Women’s Online Shopping Behaviour in Kazakhstan: An In-Depth Analysis of the Factors

Anel A. Kireyeva — 2024-09-30

Despite the growing popularity of online shopping, there is a lack of research on regional differences in consumer behaviour and preferences, particularly among women. The study aims to investigate the regional differences in women’s online shopping behaviour in Kazakhstan by conducting an in-depth analysis of the factors influencing female consumers. Using data from a survey of 400 women across different regions of Kazakhstan, logistic regression analysis was utilised to examine the relationship between online shopping frequency and several independent variables. The analysis found that the pandemic significantly affected online shopping behaviour in Kazakhstan, leading to decreased shopping frequency across all regions. Additionally, we found that women living in urban areas were significantly more likely to shop online frequently than those in rural areas, with an odds ratio of 0.504 (p = 0.014). The research also revealed notable differences in Internet penetration rates, with Karaganda, Pavlodar regions and Astana city having the highest rates among women (93.1 %, 93.0 %, and 94.5 %, respectively), while Atyrau and Kyzylorda regions had the lowest (80.7 % and 80.0 %). Therefore, it is recommended that policymakers should focus on expanding Internet infrastructure in remote regions by developing customised online marketplaces that meet the needs of urban areas like Almaty city. The findings of this study underscore the importance of considering regional differences in understanding the factors that drive online shopping behaviour in Kazakhstan. By investing in initiatives that promote e-commerce adoption and cater to consumers’ unique needs and preferences in different regions, policymakers can help foster a more inclusive and dynamic e-commerce ecosystem in Kazakhstan.

Industry 4.0 Digital Skills and Performance in Manufacturing: The Impact of Heterogeneous Regional Contexts on the Human Capital

Ilia M. Chernenko — 2024-09-30

Digitalisation is often perceived as a driver of operational performance in manufacturing, but the mechanisms by which advanced digital skills influence productivity remain poorly understood. Digitalisation processes are heterogeneous in nature and are shaped by regional factors. The study aims to explore how workers’ digital human capital affects the performance of production systems in the metallurgy sector considering differences in regional digitalisation contexts. The research methods are based on multigroup analysis of partial least squares structural equation models (MGA PLS-SEM), in which the dependent variable is the performance of production systems. The research measured accumulated human capital as a stock of relevant digital basic and specific skills using a survey of 2 570 employees conducted in 2022 in Sverdlovsk, Chelyabinsk, Rostov, and Volgograd oblasts, which differ in their levels of digitalisation, innovation, industrial specialisation, and gross income. The findings indicate that advanced digital skills not only complement basic ones but also significantly enhance production performance, as the standardised path coefficients are ranging between 0.4 and 0.7. Specifically, the industrially advanced Chelyabinsk oblast shows a more significant impact of basic digital competencies on Industry 4.0 skills, though path coefficients are still less than 0.2, suggesting a moderate overall effect of Industry 4.0 skills on performance across all regions. This study contributes to the contextual economics perspective by demonstrating the heterogeneous nature of digital human capital accumulation within a single industry.

Rankings and the Typology of Russian Regions by Housing Affordability and Availability in the 1990s–2020s

Igor V. Pilipenko — 2024-09-30

Until the present, the common approaches predominantly employed by the government of the Russian Federation in fostering mortgage lending have not yet resulted in reduction of regional imbalances and, moreover, contributed to exacerbation of the problem of housing affordability during last five years. Thus, it became objectively necessary to differentiate the policy on housing construction in accordance with the housing market’s features in the Russian regions. Having identified some shortcomings in the Russian-language studies that made use of standalone, integral and groups of indicators as well as classifications of regions, this article proposes an approach to ranking and composing a typology of Russian regions based on the calculations of nine indicators. These are regional shares in all-Russian housing construction volumes in urban and rural settlements during the 1990s–2020s compared with average regional shares in the total population, changes in the average size of apartments and individual houses built, average housing affordability coefficients and the average share of individual housing construction in total housing construction in the medium term. The calculated indicators reveal considerable volumes of second housing construction within largest agglomerations and the increasing share of individual housing construction in 51 regions. It was also found that the average size of apartments built decreased in 79 Russian regions during the 2000–2020s, and there was 1.4 to 3.5-fold difference across regions in the average size of apartments and individual houses built. As a result, nine classifications of regions were composed comprising five groups each and a typology of Russian regions consisting of 16 types / subtypes characterising housing affordability and housing availability. The proposed author’s typology of Russian regions allows enhancing or adjusting the state housing policy taking into account regional housing markets’ differences between urban and rural settlements and between the sectors of apartment buildings and individual housing

Measuring the Efficiency of Public Employment Services in Russia: Which Regions Have Similarities?

Stephan Brunow — 2024-09-30

Public Employment Services provide support for firms and individuals in finding new employment opportunities. They are important actors at the labour market, since well-functioning services reduce costs of search friction and increase matching efficiency. In this paper we adopt the regional classification scheme to identify similarities of regions and their PES on the basis of regional labour market-oriented characteristics. The purpose of the scientific search is the theoretical justification and empirical confirmation of Russian regions’ similarity in terms of employment level and the formulation of areas for increasing the efficiency of public employment services. The tasks were solved using expert analytical methods, analysis of statistical rows, clustering and cartography. The clustering is based on Ward’s hierarchical method, clusters are plotted on weighted standardised data. The official information from the Federal State Statistics Service of the Russian Federation (Rosstat) are analysed. We identified 7 clusters, in which PES have rather similar conditions. The heterogeneity of conditions is higher between clusters. PES within a cluster are valid for comparison and the adoption of new services and best practice examples. We show that the classification of the Russian Economic Zones does not necessarily cover similarities at local labour markets. The practical significance of the results is due to the possibility of using them to develop decisions for long – and short-term support for employment and the formation of an optimal labour market structure both at the state level and at the level of constituent entities of the Federation.