Assessment of resilient development of the regional economies based on Mahalanobis distances

Abstract

The purpose of this study is to assess the resilience of the development of the Russian regions using the Mahalanobis distance methodology. I test a number of hypotheses about the relationship between resilient development and its level, rate, and the degrees of economic openness and sectoral diversification of the economy. The study relies on the data provided by the Federal State Statistics Service of the Russian Federation on 83 Russian regions from 2000 to 2017. The level of economic resilience was determined using five particular indicators per capita: the revenue of the consolidated budgets of the constituent entities of the Russian Federation, the actual final consumption of households, the investments of firms in fixed assets, exports and imports. Bringing partial indicators of development to a single indicator was carried out by calculating the Mahalanobis distances, demonstrating the average normalized distance of the region to a particular center. The construction of temporal regressions of the Mahalanobis distances for each region made it possible to separate the stable trend of their development from the cyclical component. To assess the absolute and relative levels of the instability of regional development, I used the standard deviation of the residuals of these regressions and its ratio to the time-average Mahalanobis distance of each region. To test the hypotheses, I constructed multivariate regressions based on spatial samples of regions. As a result of the study, I obtain assessments of the level and rate of development, as well as the levels of absolute and relative stability, both for 5 particular indicators and for a composite indicator in all Russian regions. A positive and rather high correlation was found between the level of regional development and its absolute instability. Among the least stable, I found a number of dynamically developing mining regions of the Russian Federation, such as the Tyumen and Sakhalin regions, the Yamalo-Nenets and Khanty-Mansi Autonomous Okrug, but also the Kaluga region with a developed manufacturing industry. Some of the less developed regions of the European part of Russia with a fairly diversified economy (Chuvash Republic, Ulyanovsk, Penza and Kirov regions) turned out to be the most stable. The study confirmed the hypotheses about a positive relationship between the degree of development instability and its level and rate, as well as the degree of openness of the economy, and about the negative relationship between the instability and the level of sectoral diversification of the economy. The results of the study can be useful in managing the resilient development of Russian regions.