ECONOMIC COMPLEXITY ANALYSIS IN CASE OF SPATIALLY POLARIZED REGIONAL TRADE FLOWS

Abstract

In recent years, significant qualitative changes have been observed in foreign trade of Russian regions, especially those distinguished by their border location. This applies both to the volume and structure of foreign trade flows and to their geography. The main reason for this is associated with increased geopolitical tensions, global shifts in markets and national and regional economies. Taken together, these changes are affecting the state and development of regions, including the conditions for growth of their economic complexity related to their positions in foreign markets. The study aims to assess the spatial polarization in foreign trade flows and to identify its impact on the development of a border region through economic complexity (with the Kaliningrad region taken as an example). Exclave position of the Kaliningrad region provides a perfect opportunity to assess patterns of change in foreign trade flows and their impact on the region's development conditions. We have established that changes in the geography of foreign trade flows occur predominantly for simpler products. The more complex the products, the less the polarization of foreign trade flows. However, an inverse correlation has been identified for complexity and spatial polarization. Consequently, regional development requires support for expanding the geography of trade partners within modern innovation-technology boundaries. The choice of key geographical markets is determined by the current potential for complexity growth in product categories and product types, as well as by the possibilities for developing new competencies to produce more diverse and complex goods.