Mikhail Afanasyev

Victoria Rudenko

Sergey Aivazian

On the basis of the author’s methodology it is built static and dynamic models of the production potential of the regions of the Russian Federation. The conclusion was made, that it is not appropriate to conduct the division of regions into clusters in a productive potential model for the period in question. Characteristics of the regions’ readiness to innovate were identified, they allow a treatment as factors of production efficiency. It is shown that the integration of the efficiency in the productive potential model can significantly improve differentiation estimates of production’s technical efficiency. Locally effective regions which have relatively high efficiency estimates among regions with similar amounts of GRP and locally inefficient regions were identified by a comparison of the regional ratings of real GRP and boundary GRP. The using of “local efficiency” concept becomes constructive in the context of determining the prospects of the region’s development based on meaningful interpretation of a set of indicators which characterize the efficiency factors. Marginal effects influence of the factors’ effectiveness on the result of industrial activity in the region and the corresponding elasticities were calculated.