Impact of the sectoral structure of regional economy profitability on GRP

Alexander V. Kudrov ()

Economics of Contemporary Russia, 2024, issue 4

Abstract: The article analyzes the factors affecting the profitability of the economy of the Russian regions. These factors are represented by the main economic characteristics of the regional economy, reflecting the structure of the economy, level of development, stock‑intensity etc. The methodology of analysis includes two stages: first, the identification of variables directly related to profitability on GRP; second, the construction of a nonlinear regression model using the identified directly related variables as explanatory factors. As a result, for GRP profitability we obtained a sufficiently accurate nonlinear regression model, which includes indices of extractive and manufacturing industries, as well as GRP per capita. The obtained model allows to identify conditions on GRP per capita and industry indices, under which profitability on GRP will decrease. This allows to demonstrate that at different stages of economic development, different sectoral structure of the regional economy is required to maximize profitability. In particular, in highly developed regions, the development of traditional production industries corresponds to the decreasing profitability. The results demonstrate that economic strategies adaptive to specific regional characteristics are necessary when targeting profitability by GRP.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ack:journl:y:2024:id:1040

DOI: 10.33293/1609-1442-2024-4(107)-60-76

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