Evaluating the Effectiveness of the Regional Industrial Policy Implementation

Abstract

The industrial development is of great importance for balanced economic growth. Emerging new trends such as circular transformation, digitalization, etc. predetermine the need to formulate new methodological approaches to evaluating the effectiveness of industrial policy. Regional imbalances shift the research focus towards assessing the emerging gaps. To do so, we present a multi-criteria methodology for evaluating the effectiveness of the regional industrial policy. Using statistical and structural analysis and 2015–2019 data for 19 regions of Russia, the paper examines the comparative effectiveness of the ongoing industrial policy and identifies the strengths and weaknesses of the industrial regions. Among the key development problems revealed in the study are low pay in the manufacturing industry; high depreciation of fixed assets of industrial enterprises; insufficient investment in technological innovation; falling labor productivity and profitability of the manufacturing industry; and insufficient level of environmental safety of industrial production. The research confirms the hypothesis that industrial policy’s effectiveness is influenced by legal regulations at regional level. The findings demonstrate that the top performers in the regional industrial policy implementation have introduced relevant regulations over 15 years ago. Hence, the earlier the institutional norms for supporting industrial regions are adopted, the more efficient the industrial development is going to be in the future. The proposed methodology involves a comprehensive assessment of the industry growth, which allows performing comparative analysis of the regions’ development dynamics.