The impact of structural complexity on the sustainability of regional economic systems to shocks

Aim. The work aimed to study and measure quantitatively the relationship between the structural complexity of the economies of Russian regions and their sustainability to economic shocks. Objectives. The work seeks to adapt the methods for assessing the structural complexity of regional economies taking into account Russian specifics; test the methods for assessing the sustainability of regional economies to shocks; perform the model analysis of the relationship between the economy structural complexity and sustainability to shocks using the example of 85 constituent entities of the Russian Federation (RF). Methods. The methods included correlation-regression and cluster analysis to assess the relationship between economic complexity and sustainability to shocks while controlling for the level of economic development and other factors. Results. Based on the analysis of data on 85 constituent entities of the Russian Federation for 2014–2023, a modified regional economic complexity index (RECI) and a regional shock sustainability index (RSI) were developed. The sustainability of regions to economic shocks was measured using a regression model. Clustering of regions by level of sustainability and economic complexity was performed. It was established that regions with a high level of gross regional product (GRP) but low economic complexity (for example, raw materials regions) demonstrate high volatility of economic growth and low sustainability to shocks. Significant differentiation of Russian regions by level of economic complexity and sustainability to shocks was revealed. Conclusions. The study confirms the hypothesis that regions with a more complex economic structure are more resilient to economic shocks. Economic complexity was revealed to be a more significant factor in sustainability to shocks than the overall level of economic development measured by GRP per capita.