Evaluation of interaction between chosen indicators of development of regions in Ukraine

Abstract

Research background: In recent years, special attention has been given to the research direction regarding the study of economic, social, and demographic aspects of regional development. This direction is especially important for transition countries, including Ukraine. Despite that, there is a lack of research studies in which interdependencies of economic and demographic indicators of Ukraine’s regions are investigated. \nPurpose of the article: The paper assesses the relationships between the selected indicators of Ukrainian regions (export of goods per capita, foreign direct investment per capita, and the average resident population) and gross regional product per capita. \nMethods: Research results were compared in the periods before and during the military conflict in the eastern part of the country, based on regional data for 2010 and 2015. We used a multiple linear econometric model and tested multicollinearity. \nFindings & Value added: The analysis confirms that there is a positive correlation between export of goods and gross regional product and between foreign direct investment and gross regional product. That is why it is necessary to pay attention to the effective use of existing trade opportunities, especially within the framework of the Ukraine — EU Association Agreement, and to elaborate directions for further expansion of export activities. It is important to provide simpler and more understandable conditions in order to attract foreign investments in Ukrainian regions. \nOur study also shows that there is no influence of the average resident population on gross regional product. In many aspects, the interaction between demographic and economic components takes place through the labour market. This situation indicates that insufficient attention is given to regional employment issues, and the quantitative and structural imbalance is observed on the labour market at the regional level. In our opinion, to improve the situation, targeted activities should be elaborated on in the frame of regional development programmes.