Modelling the Efficiency of the Use of Production and Investment Resources at the Regional Level: The Case of Russia

Gayane L. Beklaryan, Andranik S. Akopov
International Journal of Economics & Business Administration, Volume VII, Issue 3, 151-166, 2019

Abstract:

Purpose: The aim of this article is to examine the efficiency of the use of production and investment resources at the regional level in the Russian Federation. Design/Methodology/Approach: The important feature of the suggested approach is to take into account the average (normative) return of sectoral resources by computing the efficiency scores of regions. Methods of agent-based modelling (ABM) were applied in the investigation using the ‘gravity effects’ that described the behaviour of agent-enterprises. Moreover, agent-investors regarding agent-regions are considered. Findings: The key findings are: (1) There is a significant inequality and a gap between the leading regions of Russia (such as Moscow, Moscow Oblast and Saint Petersburg) and other regions. At the same time, many non-leading regions are more stable and attractive; (2) A complex classification of Russian regions based on solving four tasks, namely the ‘ratio of production to labour’, ‘ratio of production to assets’, ‘ratio of investments to labour’ and ‘ratio of investments to assets’ is an effective approach to estimate region states; (3) In the leading regions e.g., Moscow, has decreasing efficiency scores after 2014, which is probably due to the large influence of crisis phenomena on the largest Russian agglomerations in comparison with other regions; (4) The ‘gravity model’ explains the behaviour of economic agents and allows forecasting the number of regional enterprises and investors. Practical implications: The developed method can be practically applied for other countries with non-homogeneous regional economies. Originality/Value: For the first time the dynamical model of the efficiency of the use of production and investment resources at the regional level of Russia is suggested. Such model allows examining regional changes.


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