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Regional Economics: Theory and Practice
 

Priorities of the long-term socio-economic development of the region: Econometric models of production functions

Vol. 14, Iss. 10, OCTOBER 2016

PDF  Article PDF Version

Received: 1 March 2016

Received in revised form: 14 March 2016

Accepted: 22 March 2016

Available online: 24 October 2016

Subject Heading: ECONOMIC-MATHEMATICAL MODELING

JEL Classification: C52, O47, R15

Pages: 147-156

Arzhenovskii S.V. Rostov State University of Economics, Rostov-on-Don, Russian Federation
arzhenov@gmail.com

Shekhovtsov R.V. Rostov State University of Economics, Rostov-on-Don, Russian Federation
hekrom71@gmail.com

Importance The article studies the changes rate of the long-term socio-economic development of a region by its economic activity, using the Rostov oblast as a case study.
Objectives The article aims to estimate the production functions and identify resource opportunities for economic activities of the region.
Methods For the study, we used the method of regression modeling, and after-modeling economic analysis of production functions of Cobb-Douglas type. We used the Federal State Statistics Service in the Rostov oblast statistics data for 2004–2014 as an information base of the work.
Results We built production functions for all economic activities of the Rostov oblast, including restrictions on the coefficients of elasticity. We obtained statistically significant production function equations for 14 of the 32 types of economic activity, and calculated the average and marginal products of factors for certain economic activities.
Conclusions and Relevance The estimates of production functions in the Rostov oblast for economic activities are applicable to determine priorities when developing a strategy for socio-economic development of the region. For certain types of activities, we disclosed an analytical capability for economic analysis of production functions based on the output elasticity estimates calculated by factors. We found that for most important functions, the rate of output growth by activities is higher than by factors.

Keywords: Cobb-Douglas production function, economic activity, regression analysis, regional growth

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