Comparative Analysis of σ-and β-Convergence of the Economic Growth of the Southern Russia Regions

Abstract

The article substantiates the strengthening of differentiation of economic growth in the Southern Russia regions during the introduction of international sanctions, reveals the trend of delayed and negative growth dynamics, which should be considered when developing a short-term forecast of economic growth in the Southern Russia macroregion. The calculated data of the GRP β-convergence regression model for SFD-12 and NCFD confirmed the hypothesis of absolute GRP β-convergence only in the period before the introduction of international sanctions (1998-2014). Calculations of unconditional convergence indicate the absence of a single trajectory of balanced growth for all regions of the South of Russia: there is a process of divergence, stratification of the population in terms of living standards, and increased social tension. The σand β-convergence model's study confirms the club convergence effect's presence and shows the need to form differentiated regional development strategies to reduce the gap between rich and poor Southern Russia regions. Cluster analysis of the socio-economic development of Southern Russia (NCFD and SFD) regions shows an unstable cluster and intra-cluster grouping of regions by economic and demographic indicators before and after the introduction of international sanctions. The convergence analysis in the conditions of increasing external shocks confirms the presence of different catch-up development rates in the Southern and North Caucasus macroregions. That can lead to a slowdown in the macroregion's economic growth and indicates the need for early formation of mechanisms to smooth out exogenous factors' negative effects on the region's trajectory of economic growth.