Subject. The article discusses the influence of the regional economy sectoral structure and the level of its economic complexity on the gross regional product and its profitability in the constituent entities of the Russian Federation. Objectives. The study aims at the development, modification, and verification of two econometric models: expanded GRP production function, considering industry specialization and economic complexity index; nonlinear GRP profitability model, reflecting the impact of specialization and regional economy structure; identification of threshold effects for structural indicators, beyond which changes in specialization and industry structure cease to contribute to the growth of regional economy profitability. Methods. The study employs the probabilistic and statistical analysis, including the component analysis to build industry specialization indices, the spectral analysis to assess economic complexity, the analysis of direct relationships between variables, and the construction of nonlinear regression models for GRP and its profitability. Results. The influence of economic complexity on GRP is manifested only when the threshold level is exceeded, which is interpreted as the achievement of "structural maturity" of the regional economy. In less developed regions, the growth of extractive and manufacturing industries increases the profitability of GRP, while in highly developed regions, excessive specialization in manufacturing sectors leads to its decline. I obtained estimates of critical thresholds for GRP per capita and industry indices, beyond which there is a decrease in profitability. Conclusions. The effectiveness of regional economic policy depends on the stage of region’s development. Industrial sector expansion strategies are appropriate only at the early stages of development.
Keywords: industry specialization, economic complexity, regional economy profitability, econometric modeling, return to scale
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