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Identification of Economies of Scale in Regional-Industrial Production Complexes of Russia: Theoretical Foundations and Econometric Estimates

Author

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  • Evgeny V. Balatsky, Natalia A. Ekimova

Abstract

International economic sanctions against Russia are aimed at blocking such a vital phenomenon as the scale effect. In this regard, it is necessary to search for internal reserves for the manifestation of this effect and use it to simultaneously stimulate economic growth and technological progress. The aim of the article is to develop a simple toolkit to identify the scale effect for any industries and regions of the Russian Federation in order to identify the most promising territorial-industry clusters, investments in which can give the maximum return in terms of production efficiency growth. The proposed method was tested by constructing universal econometric dependencies for the agricultural sector in 82 regions of Russia. The obtained quantitative results of the elasticity of labor productivity by production volume made it possible to map the country's agriculture into more and less promising regions. In addition to the effect of scale, the use of an additional factor - the achieved technological level of the region relative to the national average - allowed us to assess the possible structural effect of investment injections into the regional cluster of enterprises, to refine the applied calculations and to select 22 most promising subjects of the Russian Federation, of which 7 regions are capable of becoming the technological driver of the Russian agricultural sector of the economy. These calculations made it possible to draw a map of the most promising industry clusters in Russia. The issue of organizing the borrowing of advanced agrarian technologies within the country - from the advanced regions and enterprises to the lagging ones - is discussed. The inverse relationship between the achieved technological level of enterprises and the value of the scale effect has been established, which indicates the gradual exhaustion of this effect in the process of technological progress.

Suggested Citation

  • Evgeny V. Balatsky, Natalia A. Ekimova, 2024. "Identification of Economies of Scale in Regional-Industrial Production Complexes of Russia: Theoretical Foundations and Econometric Estimates," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(2), pages 394-421.
    • Handle: RePEc:aiy:jnjaer:v:23:y:2024:i:2:p:394-421
    DOI: https://doi.org/10.15826/vestnik.2024.23.2.016
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    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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