Subject. The article deals with the use of gravity models to analyze economic interactions between regions. Objectives. The study aims to develop and test a modified version of the gravity model to assess the strength of economic ties between regions in the Ural Federal District, using Data Science methods and data analysis tools of the R language of the modified gravity model. Methods. The study offers a modified gravity model enabling to more accurately assess the strength of economic ties between regions based on the aggregation of a variety of economic indicators under the principal components method, and obtain indicators of economic potential of the region in the economic system. The Haversine formula was applied to calculate distances between the capitals of regions of the Ural Federal District. Results. The model was applied to the Ural Federal District regions. This showed that the Sverdlovsk and Chelyabinsk Oblasts are the leading economic centers of the region, while the Khanty-Mansi and Yamalo-Nenets Autonomous Districts demonstrate less close ties with industrial regions due to their remoteness from the centers. The findings can be used to work out regional development strategies aimed at strengthening inter-regional ties, improving infrastructure, and diversifying the economy. Conclusions. The proposed model can be useful for analyzing and evaluating economic ties and the potential of regions in various macroeconomic contexts, which make it applicable for regional policy planning.
Keywords: gravity model, economic relations, regional development, principal components method, Ural Federal District
References:
Anderson J. A theoretical foundation for the gravity equation. The American Economic Review, 1979, vol. 69, no. 1, pp. 106–116. URL: Link
Anderson J.E., Yotov Y.V., Vesselovsky M. Gravity with scale effects. Journal of International Economics, 2016, vol. 100, pp. 174–193. URL: Link
Anderson J.E., Yotov Y.V. Terms of Trade and Global Efficiency Effects of Free Trade Agreements, 1990–2002. NBER Working Paper,2011, no. 17003, 43 p. URL: Link
Bergstrand J.H. The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade. The Review of Economics and Statistics, 1989, vol. 71, no. 1, pp. 143–153. URL: Link
Bergstrand J.H., Egger P. Gravity Equations and Economic Frictions in the World Economy. In: Bernhofen D., Falvey R., Greenaway D., Kreickemeier U. (eds) Palgrave Handbook of International Trade. Palgrave Macmillan, London, 2013, pp. 532–570. URL: Link
Baldwin R.E., DiNino V. Euros and Zeros: The Common Currency Effect on Trade in New Goods. NBER Working Paper,2006, no. 12673, 24 p. URL: Link
Crozet M., Koenig P. Structural gravity equations with intensive and extensive margins. Canadian Journal of Economics / Revue Canadienne d`Economique, 2010, vol. 43, iss. 1, pp. 41–62. URL: Link
Evenett S.J., Keller W. On Theories Explaining the Success of the Gravity Equation. Journal of Political Economy, 2002, vol. 110, iss. 2, pp. 281–316. URL: Link
Santos Silva J.M.C., Tenreyro S.The Log of Gravity. Review of Economics and Statistics, 2006, vol. 88, iss. 4, pp. 641–658. URL: Link
Kaukin A., Idrisov G.[The Gravity Model of Russian Foreign Trade: A Case of a Country with Large Area and Long Border].Ekonomicheskaya politika = Economic Policy, 2013, no. 4, pp. 133–154. URL: Link (In Russ.)
Naumenko R.V. [Prospects of the usage of gravity equations in bilateral economic relations between Russia and India]. Uchenye zapiski Krymskogo federal'nogo universiteta imeni V.I. Vernadskogo. Ekonomika i upravlenie = Scientific Notes of V.I. Vernadsky Crimean Federal University. Economics and Management, 2017, vol. 3, no. 3, pp. 89–100. URL: Link (In Russ.)
Ledyaeva S., Linden M. Testing for Foreign Direct Investment Gravity Model for Russian Regions. Department of Business and Economics, University of Joensuu Working Paper, 2006, no. 32, 26 p. URL: Link
Mariev O., Drapkin I., Chukavina K. Is Russia successful in attracting foreign direct investment? Evidence based on gravity model estimation. Review of Economic Perspectives, 2016, vol. 16, iss. 3, pp. 245–267. URL: Link
Mitze T., Alecke B., Untiedt G. Trade-FDI Linkages in a Simultaneous Equations System of Gravity Models for German Regional Data. International Economics, 2010, vol. 122, pp. 121–162. URL: Link60032-3
Li Yating, Pan Shaoqi, Miao Changhong. Structure and Evolution of Economic Linkage Network at County Level in Central Plains Economic Zone. Geographical Research, 2014, vol. 33, iss. 7, pp. 1239–1250. URL: Link
Meng Deyou, Lu Yuqi. Strength and Direction of Regional Economic Linkage in Jiangsu Province Based on Gravity Model. Progress in Geography, 2009, vol. 28, iss. 5, pp. 697–704. URL: Link
Wei Zhiyuan, Wang Xuemeng. Regional Economic Linkages and Evolution along the New Western Land and Sea Corridor. Information Systems and Economics, 2023, vol. 4, iss. 2. URL: Link
De-li Wang, Chuang-lin Fang. Industrial division and linkage among regions of China. Geographical Research, 2010, vol. 29, iss. 8, pp. 1392–1406. URL: Link
Mogilat A.N., Sal'nikov V.A. [Trade Effects Estimation for the Case of Eurasian Economic Space Countries: Application of Regional Gravity Model]. Zhurnal Novoi ekonomicheskoi assotsiatsii = Journal of the New Economic Association, 2015, no. 3, pp. 80–108. URL: Link (In Russ.)
Evchenko A.V. [Use of production functions in forecast calculations for growth in economy]. Ekonomika i upravlenie = Economics and Management, 2006, no. 1, pp. 37–41. URL: Link (In Russ.)
Melikhova E.V. [Econometric models in socio and economic indicators forecasting for Volgograd region]. Trud i sotsial'nye otnosheniya = Labour and Social Relations Journal, 2013, vol. 24, no. 11, pp. 125–130. URL: Link mb3v43g92kd7gphxao0wow2rh0lnlnwm/tiso_2013_11.pdf (In Russ.)
Zvyagintseva O.P., Tsar'kov D.A. [Economic-mathematical model to determine the competitiveness of the region: Description, rationale, unique]. Sovremennaya konkurentsiya = Journal of Modern Competition, 2012, no. 4, pp. 100–104. URL: Link (In Russ.)
Krupko A.E., Fetisov Yu.M., Rogozina R.E. [Interpretation of correlation and regression analysis of the main factors of economic development of the CFD]. FES: Finansy. Ekonomika. Strategiya = FES: Finance. Economy. Strategy, 2018, vol. 15, no. 12, pp. 22–29. (In Russ.)
Nev'yantseva L.S., Radkovskaya E.V. [Use of the economic and mathematical modeling in the study of the gross regional product]. Vestnik Severo-Osetinskogo gosudarstvennogo universiteta imeni K.L. Khetagurova = Bulletin of North Ossetian State University named after K.L. Khetagurov, 2020, no. 1, pp. 147–157. (In Russ.) URL: Link
Melent'ev B.V. [Inter-regional approach to estimate the economic development of certain areas]. Vestnik Buryatskogo gosudarstvennogo universiteta. Ekonomika i menedzhment = BSU Bulletin. Economics and Management, 2014, no. 1, pp. 55–59. URL: Link (In Russ.)
Belousova A.V. [Modeling of economic effects of changing of the region’s external environment parameters]. Regionalistika, 2017, vol. 4, no. 3. (In Russ.) URL: Link
Nazarov D.M. [Economy 2.0: Neoclassics, digital transformation and evolutionary economy]. Izvestiya Sankt-Peterburgskogo gosudarstvennogo ekonomicheskogo universiteta = Bulletin of Saint-Petersburg State University of Economics, 2023, no. 4, pp. 7–16. URL: Link (In Russ.)
