Home  Journals  Regional Economics: Theory and Practice  37(412) - 2015 October

Determining the region’s development priorities through economic and mathematical modeling of its economic potential

Vol. 13, Iss. 37, OCTOBER 2015

Article PDF Version

Received: 16 February 2015

Received in revised form: 13 March 2015

Accepted: 30 March 2015

Available online: 20 October 2015

Subject Heading: SUSTAINABLE DEVELOPMENT OF REGIONS

JEL Classification: 

Pages: 34-43

Importance The article provides a comprehensive and statistical evaluation of factors that form the region's economic potential. The evaluation relies upon correlation and regression analysis and allows developing special-purpose programs for the region's development, rather than making forecast models only, considering the existing economic indicators.
     Objectives The objective of the research is to determine development priorities of the Orel oblast by setting up a multiple correlation and regression model of the region's economic potential.
     Methods To measure the region's economic potential, we applied production, social, and financial indicators.
     Results We figured out what factors laid the basis for the economic potential of the Orel oblast and built a multi-faceted correlation and regression model of the region's economic potential for the 2003 to 2012 period and evaluated its adequacy. It helped determine linear and production factors of Gross Regional Product and consider infrastructure specifics of the area under study. Based on the economic and statistical model, we formulated the key principles of socio-economic development in the Orel oblast for a short-term period.
     Conclusions and Relevance In a short-run, the Orel oblast should retrofit the key production equipment, considering that the return on investment in fixed assets will significantly exceed respective costs. Refurbishment of equipment will require new professional staff, thus creating new jobs and subsequently lowering unemployment. High-qualification personnel will entail an increase in salaries and growth in GRP by 0.34 percent. It will make the work places more attractive and boost demand and the region's economic potential.

Keywords: economy, potential, region, correlation and regression model, factors

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