In-depth" factors of regional economic growth

The problem of uneven spatial development remains relevant for Russia and many other countries. Neoclassical and cumulative theories of regional growth mainly consider the dynamic aspect of regional inequalities. The emergence of differences in the trajectories of regional development is usually associated with an arbitrary factor. Meanwhile, evidence suggests that the stationary (steady) level of regional asymmetries may lead to the upturn of some regions and the downturn of others. Strengthening the asymmetry can be followed by both the overall growth and overall recession. Among other matters, these theories do not give enough attention to the issues of the state policy of regional development. In fact, the current level of social and economic development of a region as well as its position relative to other regions depends on a wide range of factors. Traditionally, the accumulation of factors of production and the increase in performance through innovations are considered growth drivers in the economic theory. However, the rate of these processes at the regional level is partly determined by exogenous ("in-depth") factors, among which are the following: 1. Physical and geographical characteristics. These characteristics can be the cause of regional differences in the production profitability and the prices for commodities, work, and services. 2. Economic and geographical location. The ability to realize export potential has assumed great importance under the market conditions, namely, the access to the market or the market potential. 3. Infrastructure. Infrastructure not only facilitates the access to markets in the region, but also increases the efficiency and performance of the regional economy, thereby strengthening the competitive position of the region in the interregional and international trade. 4. Institutions. This factor may influence the factor mobility and provide incentives to their accumulation. In the regional development practice, institutions are reflected in the regional policy pursued at the federal and subnational levels. Generally, regional policy is subordinate to other factors of the regional development and comprises specific compensatory mechanisms that characterize its features and the ability of a region to adapt to the present conditions of the regional economy. Eventually, the conditions (potential) for the regional development establish under the influence of the above-mentioned factors. They are manifested in the size and structure of the regional economy, the quality of the infrastructural and institutional environment, the settlement system, and the trade intensity. However, the potential for regional development is determined not so much by the scale of the regional economy, population or infrastructure provision, as by the quality of institutions, the pro-gressiveness of the sectoral structure of the regional economy, and the degree of involvement in the territorial and international division of labor. These characteristics in particular influence the investment decisions of entrepreneurs and choice of residence by population.

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