Economic Growth Of The Russian Industrial Regions: The Urals Case Study

Abstract

Current economic growth indicators in Russian regions show a significant decline, zero growth, and even negative dynamics. This trend concerns the Urals as well. The author models economic growth drivers for the Urals' regions within the Urals Federal District and the Urals Macro-region. Seven regions of the Russian Federation are included in the research. They are: Kurgan Region, Orenburg Region, Sverdlovsk Region, Tyumen Region, Chelyabinsk Region, Bashkortostan Republic, Udmurtiya, and Perm Territory. The study is based on neoclassical economics' methodological issues, which implies dependency of the output volume on the applied factors of production within the production function. Applying neoclassical methodology and using economic instruments, the author conducts quantitative research and builds several regression models. A multiplicative modified Cobb-Douglas function is built for every region involved in the research. The variables for this function include five factors: industrial production growth rate, employment growth rate, fixed asset investment growth rate, fixed capital growth rate, and per capita income growth rate. Regional Gross Domestic Product growth rate serves as a resultant variable. According to the developed econometric models, the author concludes the most resilient parameters of the equations, consequently determining the most significant factors that affect economic growth in every region involved.