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Diversification of the economy in Russia’s regions: Measurement and trends

Zaretskaya V.G. Financial University under Government of Russian Federation, Kursk Branch, Kursk, Russian Federation ( zar.59@mail.ru )

Titkova I.K. Financial University under Government of Russian Federation, Kursk Branch, Kursk, Russian Federation ( yana508.titkova@yandex.ru )

Journal: National interests: priorities and security, #12, 2017

Importance The article explores the diversification of the economy in the Russian regions.
Objectives We demonstrate the way the diversification of the region's economy correlates with its economic development level.
Methods The research involves indices of the development evenness (specialization level), Ryabtsev index, Szalai index, Gatev index, Theil index, entropy index and Herfindahl-Hirschman index. Having analyzed strengths and weaknesses of those measurement methods and diversification, we concluded it would be reasonable to use the Herfindahl-Hirschman index. We conduct an econometric analysis of a correlation between GRP per capita and the diversification level of the region's economy.
Results Higher GRP per capita is registered in regions where one of the sectors dominates the others and diversification is lower, i.e. resource-based regions. I examine those Russian regions without a resource focus and demonstrate that the region’s economic growth depends on the production diversification.
Conclusions and Relevance If the economy of resource-based regions is diversified, it will reduce GRP per capita there. If the economy of regions without a resource focus is diversified, value added per unit of resources grows. As such regions and their economy become more diversified and more types of economic activity appear there, GRP per capita increases as well.


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