Catching-up regional strategy as a tool to reduce spatial inequality

Abstract

The article is devoted to the problem of spatial inequality of regions caused by centripetal or centrifugal forces because of agglomeration effects and interaction costs. It corresponds with the main idea of new economic geography. A differentiated approach to regional development strategizing is proposed in the study as a tool for reducing the level of spatial imbalance. Herein the use of technological arbitrage (catching-up) strategy is proposed for peripheral regions by strengthening interregional interaction. In the paper, two hypotheses are investigated: (1) The economic growth of territories, caused by industry diversification, positive externalities from Research and Development, the quality of human capital, which are typical of the ?center? type of regions and (2) The formation of a unified macroeconomic space is possible due to strategies of technological arbitrage (catchingup strategy) for peripheral regions. Its implementation is possible through innovation, industrial-technological, and trade-technological complementarity development of peripheral regions with the central regions. The research methods are: panel regression with fixed effects, Data Envelopment Analysis method, and Malmquist Productivity Index, paired interregional complementarity indices. The study focuses on 10 regions of Siberian Federal District in the Russia, which differ in scale, structure, and level of innovative economic development. The study results confirm the possibility of reducing the level of spatial inequality using catching-up strategies and innovation complementarity of the regions. These strategies proved only for technical efficiency leading regions with high index of complementarity. In regions with a low complementarity index and different industry profile, large-scale interregional cooperation has not been confirmed.