Integral Evaluation of Economic Component of Spatial Development Diversification in Ukrainian Regions

Abstract

Diversification is generally considered to reduce the risks of undesirable developments, particularly in the face of external challenges and shocks. Diversification of spatial development is a complex phenomenon that encompasses various spheres of the socio-economic development of a country’s regions. This study is devoted to the quantitative measurement of the diversification of the economic component of spatial development at the regional level. The aim of the article is to assess changes in the diversification of spatial development in the regions of Ukraine caused by military aggression. The study employs methods of multivariate analysis, namely factor analysis (principal component analysis with rotation), the method of information space aggregation (integral indicator), and the Herfindahl–Hirschman Index. The integral assessment of the level of diversification of spatial development in Ukraine’s regions is carried out based on components of the economic dimension, using indicators that describe budget structure, export activity, sectoral structure, capital investment, employment, business environment, and innovation, which were applied to analyze the geographical and sectoral dimensions of economic diversification. The integral assessment of diversification of spatial development in the regions of Ukraine made it possible to identify key diversification factors: budgetary, sectoral, tax, employment, scientific, investment and innovation, economic activity, and innovation-related factors, the composition of which changed during wartime compared to the pre-war period. The most diversified regions in terms of the economic component in 2021 and 2023 were identified, and three groups of regions of Ukraine were distinguished according to the level of diversification based on the value of the calculated integral indicator. During the analyzed period, changes in the values of the integral diversification indicator occurred in all regions; however, it was found that the overall ranking of regions remained largely stable. The application of the developed approach to assessing the level of diversification of spatial development in the regions of Ukraine will make it possible to determine the most influential diversification factors, identify disparities in diversification across different components and dimensions of spatial development, and ensure a faster response to emerging threats, in particular by identifying directions for adjusting regional-level strategies and programs. UDC: 332.13:005.591.61(478); JEL: C02; R12