• International Journal of Technology (IJTech)
  • Vol 11, No 6 (2020)

Assessment of the Contribution of Inter-Territorial Interaction in the Development of the National Economy

Assessment of the Contribution of Inter-Territorial Interaction in the Development of the National Economy

Title: Assessment of the Contribution of Inter-Territorial Interaction in the Development of the National Economy
Elena Kozonogova, Julia Dubrovskaya, Yulia Dubolazova

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Cite this article as:
Kozonogova, E., Dubrovskaya, J., Dubolazova, Y., 2020. Assessment of the Contribution of Inter-Territorial Interaction in the Development of the National Economy. International Journal of Technology. Volume 11(6), pp. 1161-1170

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Elena Kozonogova Economics and Finances Department, Perm National Research Polytechnic University, 29 Komsomolsky prospekt, Perm, Perm region, 614990, Russian Federation
Julia Dubrovskaya Economics and Finances Department, Perm National Research Polytechnic University, 29 Komsomolsky prospekt, Perm, Perm region, 614990, Russian Federation
Yulia Dubolazova Graduate School of Industrial Economics, Peter the Great St. Petersburg Polytechnic University, 29, Polytechnicheskaya, St.Petersburg, 195251, Russian Federation
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Abstract
Assessment of the Contribution of Inter-Territorial Interaction in the Development of the National Economy

Determination of the main indicators of economic growth is a key research question. In the course of solving this problem, many scientists agree that one of the drivers of economic development is interregional interaction. This article contains the results of a quantitative assessment of the role of interregional interaction for the Russian economy. The study is based on a modification of the Solow economic growth model which includes the level factor of interregional interaction. For a quantitative assessment of the effects of interregional interaction on economic development, a set of factors was determined that make it possible to assess the advantage that localization in a particular region can give to economic agents. The selected indicators have a direct impact on the potential and intensity of interregional interaction. The database for assessing the coefficients of the models and calculating the index of interregional interaction was formed on the basis of data from the website of the Federal State Statistics Service for the period from 2010 to 2018 for 83 regions of Russia. To select the best model of economic growth, considering interregional interaction, the authors evaluated different types of models: fixed effects model, time fixed effects model, random effects model, and time random effects model. The thesis about the importance of interregional interaction as one of the most important factors of production in modern Russia has found its empirical confirmation: the share of interregional interaction in ensuring the economic growth of Russian regions in the years 2015–2018 averaged 33%. The developed model of economic growth and the consideration of interregional interaction is universal and can be applied to various administrative-territorial units.

Economic and mathematical modeling; Economic growth; Interregional interaction; Regional development; Solow model

Introduction

    Sustainable development of the economy as a single integral system is impossible without the interaction of its constituent parts – regions. The interaction of territorial units realized through the cooperation of individual economic entities ensures the free movement of production, investment, and labor resources. Interregional communication has been proven to help strengthen cultural and business ties; optimize infrastructure placement based on regional cooperation; eliminate unnecessary financial costs associated with the creation of duplicate economic structures in the regions and unjustified interregional competition; combine resources and needs of territories to solve large-scale investment projects; and disseminate effective experience in the field of innovative development. All these processes are based on the principle of mutually beneficial cooperation that ensures the progressive development of the national economic system. Recognizing the practically axiomatic importance of interregional interaction for ensuring economic growth, it is important to note that scientists have not yet come to an agreement on a single generally accepted criterion reflecting the level of cooperation between territories. Indicators such as the dynamics of interregional trade or the ratio of Gross Regional Product (GRP) to the volume of wholesale trade reflect interregional ties, but represent only part of the overall picture of interregional interaction in terms of trade flows.

At the same time, while agreeing with Bakumenko (2017), we note that the method for assessing the dynamics of interregional resource flows to assess the intensity and, accordingly, forecasting the prospects of interaction is narrow: it covers only the economics of regional development and considers business as the only target group.  Interaction cannot be complete if it does not cover such basic institutional structures as government, science, and business, cooperating with each other in order to achieve a high level of economic, social, and innovative development of the territory.

        Based on the foregoing, as the goal of this work, a quantitative assessment of the role of interregional interaction in the economic development of the country is determined. The study was carried out by modifying the Solow economic growth model with the inclusion of the factor of the level of interregional interaction, which considers various aspects of interaction. Thus, the study examined the nature of the influence of interregional interaction on territorial economic growth.

Conclusion

We have found that the interaction of economic entities is an important condition for the effective functioning of the system of interregional relations, ensuring the even development of the country, which confirmed the hypothesis of the study. Thus, interregional cooperation plays a particularly important and significant role in the socio-economic development of both a separately selected region and the entire country. Therefore, when studying the development of interregional interaction, it is important to foresee the prospects and possibilities of its influence on economic growth.

        In this work, a methodology for a quantitative assessment of interregional interaction was developed and its impact on the economic development of territories was estimated. The developed model of economic growth, taking into account interregional interaction, is universal and can be applied to various administrative-territorial units.

Acknowledgement

The reported study was funded by RFBR according to the research project No. 18-310-20012.

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