Study of Spatial Effects in the Regional Labor Productivity Dynamics

Abstract

One of the advantages of the spatial concentration of economic activity is an increase in its efficiency, which can also have a positive effect on the dynamics of the economic efficiency of neighboring territories. Nevertheless, geographical proximity does not guarantee the automatic dissemination of positive spatial external effects. However, it is precisely these processes that largely determine the change in the configuration of the economic space and further possibilities for its development. The article reflects the results of a study on the role of spatial external effects in the dynamics of a regional economy efficiency indicator—labor productivity. The main research method is construction of transition probability matrices and analysis of their properties. It is shown that a high degree of inequality of regional economies in labor productivity prevents the manifestation of positive spatial external effects. Significant differences in regional economies in labor productivity worsen the relative dynamics of lagging regions and also adversely affect the relative dynamics of leading regions. Reducing the degree of difference contributes to the spread of positive externalities, accelerates the growth of labor productivity in lagging regions and favors its increase in leading regions. The results obtained indicate that regional policy aimed at containing increasing regional inequality and creating conditions for expanding interregional cooperation is more adequate with respect to the current situation.