RuEn

Journal section "Regional economy"

Strategic Classification of Regions According to the Level of Financial Self-Sufficiency

Shakleina M.V., Midov A.Z.

Volume 12, Issue 3, 2019

Shakleina M.V., Midov A.Z. Strategic classification of regions according to the level of financial self-sufficiency. Economic and Social Changes: Facts, Trends, Forecast, 2019, vol. 12, no. 3, pp. 39–54. DOI: 10.15838/esc.2019.3.63.3

DOI: 10.15838/esc.2019.3.63.3

Abstract   |   Authors   |   References
In the context of highly uneven regional development, subnational and federal governments are facing an extremely important task of elaborating and implementing the strategy for development of Russia’s constituent entities. In this regard the research on financial self-sufficiency of regions as a driver of resource security of strategic development becomes an urgent issue. The goals of our study include building a typology of regions according to the level of financial self-sufficiency and identifying strategizing features for individual groups of regions. Cluster analysis, principal component analysis and panel data analysis are used to achieve the goals. In order to build sustainable groups, we form a system of 18 indicators of financial self-sufficiency of regions; we carry out cluster analysis on its basis; after that, we identify three groups of regions: leaders, average performers, and outsiders. This classification of regions can be considered stable, since the composition of the groups has not changed over time. We carry out the principal component analysis using our set of indicators of financial self-sufficiency and identify three generalizing factors that characterize the budgetary security of the regions, the potential of regional and municipal taxes, and the tax burden on the economy. We carry out modeling with the use of panel regression and analyze the influence of each factor on financial self-sufficiency in each group of regions. The resulting classification has significant scientific prospects regarding the formation of a general strategizing methodology for regions with different levels of financial self-sufficiency. The strategic classification can be used by regional authorities to form regional and sectoral development strategies

Keywords

region, regional development, financial independence, strategy, classification, Budget security

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