Abstract
The article examines the influence of institutional factors on the competitiveness and economic security of regions. Institutional factors are classified by the nature of their influence on the competitiveness of regions and by their scope. It was determined that institutional factors affect the competitiveness of industries and sectors of the region's economy by stimulating the development of certain sectors of the economy and cooperation between enterprises within the framework of clusters. The expediency and peculiarities of the formation of clusters in order to improve competitive positions and increase the level of economic security of the region are considered in detail. In the formation of high competitive positions of the region, it is institutional factors that can contribute to the development of clusters, that is, the union of enterprises specializing in the production of similar goods and services. The use of clustering and the formation of clusters makes it possible to increase regional competitiveness by increasing production efficiency and reducing costs and risks. It was determined that in order to increase competitiveness, it is necessary to carry out institutional changes, in particular, to improve legislation, strengthen the effectiveness of law enforcement agencies, decentralize power, and develop the social sphere. Suggestions for improving the legislation have been put forward, stressing that ineffective regulatory acts can complicate business development and investment attraction. It is also noted that the irresponsible activity of law enforcement agencies can negatively affect the investment climate of the region. In addition, an important aspect is the decentralization of power, which allows regions to manage resources more efficiently and make decisions aimed at development. Special attention is paid to initiatives related to the development of the social sphere, since a high level of its development creates favorable conditions for the life and work of the population, which in turn contributes to increasing the competitiveness of the region in terms of labor force.
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