Modeling the Production of GRP Regions of the North of Russia

Abstract

Investigation of the possible application of the production functions in the managing territorial development is an important area of scientific research. The urgency of the study is explained by the objective need for management practices in research results based on a meaningful analysis of trends and regularities of interaction of the basic regional development factors. The paper presents the results of gross regional product (GRP) production modeling in the regions of the Russia’s North and in the Russian Federation as a whole (to compare the situation in the northern regions with the all-Russian situation). The scientific-practical importance of modeling GRP production in the northern regions is determined by a new approach to management based on the formation of basic development zones through a series of interrelated different scale investment projects. A new approach to management requires a reliable assessment of the investment influence on GRP production, taking into account the evaluation of the effective use of human resources. The GRP production was modeled using a multiplicative production function and a CES production function. For most of the regions of the North and Russian Federation as a whole, the authors have chosen the variants of a model linking GRP to investments, which explains at least 70% of the spread in the initial data. The obtained model’s variants are a clear means of quantitative justification of investment projects in terms of assessing their impact on the development of the territories.