Sectoral structure and profitability of GRP: regions of Russian Federation

Abstract

The article will analyze the factors influencing the Gross Regional Product (GRP) and the profitability of the economies of Russian regions. These factors are represented by the main economic characteristics of the regional economy, reflecting its structure, level of development, capital-labor ratio, etc. The analysis methodology involves two stages: first, identifying variables directly related to GRP and the profitability of the gross regional product; second, constructing a nonlinear regression model using the identified directly related variables as explanatory factors. As a result, a sufficiently accurate nonlinear regression model was obtained for the profitability of the regional economy. This model includes indices for the extractive and manufacturing industries, as well as GRP per capita. The model allows us to identify the conditions affecting the industrial indices and GRP per capita under which profitability will decrease. This demonstrates that at different stages of economic development, maximizing profitability requires balancing the industrial structure and the size of the regional economy. In particular, in highly developed regions, the development of traditional production sectors is associated with diminishing profitability. The results show that when focusing on the profitability of the regional economy, economic strategies adaptive to specific regional characteristics are necessary