Evaluating Significant Economic Factors of Municipalities’ Development Based on Spatial Analysis (The Case of Rostov Region and Krasnodar Krai)

The study aims to identify the significant factors and their direct and external effects (externalities) that influence the economic productivity of municipal entities in the Rostov Region and Krasnodar Krai. The principal tasks focus on characterizing the economic space and delineating territorial clusters of accelerated development alongside zones of economic decline in the specified regions. A spatial econometric approach has been applied. For the purposes of this analysis, authors designed SAR (spatial autoregressive model) and SEM (spatial error model) models based on municipal statistics data for 2023. Model calculations revealed that the common significant factors influencing economic productivity in both Rostov Region and Krasnodar Krai include the volume of investments in fixed capital, the average monthly wage of employees in organizations, and the density of paved local public roads. Moreover, for Rostov region, an additional growth factor at the municipal level of municipalities is the average number of employees of organizations. Using the tools of spatial econometrics, the presence of a negative spatial autocorrelation of economic dynamics between neighboring municipalities of the region has been proved. Furthermore, for both subjects, based on calculations of local spatial aggregation indicators (LISA), territorial clusters of advanced development and zones of economic recession were identified. The results obtained can serve as a basis for developing a differentiated approach to determining the directions and tools for managing socio-economic development at the subregional level.