Econometric analysis of the structure and sustainability of Ukraine socio-economic system in the context of the economic systems theory

The article is devoted to the development of a conceptually new systemic structural approach to the study of sustainability of economic systems. The problem of ensuring sustainability of economic entities remains unsolved, largely due to the lack of the necessary methodology. In the article, the approach is shaped by new economic systems theory, which implies the division of all economic systems into types depending on their spatiotemporal localization. Applied research of socio-economic system of Ukraine in its context is implemented by econometric modeling using data mining techniques and by calculating the economic sustainability index using the author’s techniques. The indicators, announced by the State Statistics Service of Ukraine, as well as the ranking and indexing results, presented by leading international organizations, are used as the parameters. Alternative hypothesis about preconditioning of economic sustainability of the macro-level system by the structural balance of its four subsystems with different spatial and temporal localization is confirmed. The results of modeling have shown a number of interesting, previously not formalized, patterns of the country’s development and have allowed to better understand the forming mechanism of its sustainability in different periods during 2000–2015. Both the methodology itself and the empirical results obtained on its basis open up a wide variety of perspectives of micro and macroeconomic analysis. Victoriia Dergachova (Ukraine), Maryna Kravchenko (Ukraine), Alexander Zgurovsky (Ukraine) BUSINESS PERSPECTIVES LLC “СPС “Business Perspectives” Hryhorii Skovoroda lane, 10, Sumy, 40022, Ukraine www.businessperspectives.org Econometric analysis of the structure and sustainability of Ukraine socio-economic system in the context of the economic systems theory Received on: 1st of October, 2017 Accepted on: 5th of December, 2017


INTRODUCTION
The biggest challenges for business entities of macro, meso and micro levels are the speed of transformations of the environment and their ability to react to them, which actualizes the problems of economic sustainability and sustainable social and economic development. However, the problems remain unsolved either theoretically or methodologically, or in practice. It is partly due to the complexity of the integration of theoretical and empirical results, and due to fragmentariness of applied methodology. Modernization of economic methodology is possible through its integration with sciences, which study complex objects as dynamic systems. In this way, the system economic theory (SET) emerged and started claiming the role of a new modern paradigm of economic research. However, the provisions of the theory are unverified and require clarification.
The assumption that application of the provisions of SET will allow us to form a systematic understanding of the phenomenon of economic sustainability and will contribute to solving the applied problem of its ensuring has led to the choice of our research direction. In this article, a conceptually new systemic structural approach to the study of sustainability of economic systems, which is formed in the context of SET, is developed.

LITERATURE REVIEW
The problems of economic sustainability and sustainable social and economic development have become one of the most researchable among the domestic scientists (see, for example, Ishchenko, 2017;Frolov, 2016;Voitko, 2017). Understanding the decisive role of innovations in ensuring the effectiveness of economic mechanisms for the formation of sustainability, the economists recognize that one of the reasons for the gaps in the spectrum of scientific research is the lack of theoretical and methodological paradigm that would enable them to be included in the structure of economic systems on the general system-building principles (Yurynets, 2016). The necessity of such inclusion was emphasized by the classics of modern theory of innovations such as Drucker, Kondratiev, Lvov.
The necessity of updating the theoretical and methodological paradigm of economic research was emphasized by Coase, Kleiner (2007Kleiner ( , 2009), Kornai (1998Kornai ( , 2016, Libman (2007), and others. System economic theory started becoming an independent economic paradigm in the works of Kornai. According to him, the angle of consideration of economic systems should be changed from the traditional endogenous to exogenous (Kornai, 1998). A similar approach was developed in the work of Pryor (2008).
In present form, the theory is formed largely in the works of the group of researchers from Central Economics and Mathematics Institute of the Russian Academy of Sciences (CEMI RAS) led by Kleiner. In various sources, the theory was called "the resource theory of the systematic organization of the economy" (Kleiner, 2011(a)), "the new theory of economic systems" (Kleiner, 2009), "the neosystem theory" (Kleiner, 2013), "system theory of economic equilibrium" (Rybachuk, 2014), "system economic theory" ), and we will follow the last name.
In theory, based on the assumptions that the system is part of the environment relatively stable in space and time, fundamental characteristics of all economic systems, regardless of their level, the presence of boundaries in space and time (the observer's perspective) is recognized. Space and time are considered to be the main forms of existence of economic systems and the measurement of economic phenomena, including sustainability (Kleiner, 2007(Kleiner, -2015Rybachuk, 2014).
The theory has a high explanatory force, assimilates the fundamental provisions of other basic economic theories, and gives an opportunity to develop their methodological shortcomings, including the inclusion of innovations in system structure. In support of the possibility of designing such a general system economic theory, it is expedient to recall the words of Samuelson who noted that the presence of analogy in the main provisions of different theories means that there should be a more general theory that unites the private and unifies them relative to common properties (Samuelson, 1960). Actually, this happens in the context of SET, which was the basis of our study of the economic sustainability of systems of micro and macro levels (Kravchenko, 2015).

THEORETICAL FRAMEWORK AND HYPOTHESIS
The main theoretical and methodological provisions for the formation of economic sustainability were summarized as follows (Kravchenko, 2015): 1. The complete group consists of four types of economic systems with different spatiotemporal localization: a) the systems of the project type which are localized both in space and time; b) the systems of process type which are localized in time, but not in space; c) the sys-tems of subject-object type which are localized in space, but not in time; d) the systems of the environment type which are not localized neither in space nor in time. A set of elements or subsystems of a certain type is considered as the economic system of this type (Kleiner, 2009).
2. None of the economic systems of one particular type is capable of sustainable autonomous functioning in the spatiotemporal continuum.
To ensure their normal functioning, systems formulate the symbiotic pairs, which lock into tetrad (from the Greek τετράδα -group of four) (Kleiner, 2009).
3. The tetrad is a minimal economic system capable of an autonomous functioning for a certain period, since its subsystems, having formed structure with unchanged nature of interconnections provide: • realizing of the full cycle of economic functions -production, consumption, distribution; exchange; • mutual supporting of subsystems within the tetrad by the resources; • ensuring the sustainability of the system through maintaining a balance of variability and stability both in space and time; • mutual substituting between elements of one type and a partial substituting between elements of neighboring types.
In order for the system to be equally stable in space and time, such properties should be expressed equally, which is possible in the case of a structural balance of subsystems among themselves.
4. Such tetrad can be allocated to each economic system at any level with sustainable structure in the long run. Table 1 shows the distribution of the elements of the subsystems of the macro level.
5. In the short run, during the lifecycles of timelimited subsystems (process and project), the basis of sustainability is the lack of subsystems dysfunctions and the inevitability of relation between them. In order to ensure the stable functioning of the tetrad in the long run, it is necessary to update Processes and Projects to replace those with a complete lifecycle.
6. Interaction of the systems as components of higher-level systems occurs on the same principles as inside the tetrad, resulting in a logical matrix structure, where the number of counteragents of each system is duplicated in each direction, but their set remains unchanged.
The postulates of the theory and the derived methodological provisions have allowed formulating the hypothesis that the economic sustainability of the macro-level system is structurally balanced by its higher-defined subsystems. If so, then assessing the level of economic sustainability can be based on the measurement of structural equilibrium. This hypothesis was the basis of applied research. Previously, a similar hypothesis was put forward The subsystem of the subject-object type ( )

Population
As the subject and object of economic activity, which includes both economically active and inactive categories The subsystem of the environment type ( ) As the form of organization; which is determined by the state social and economic arrangement and by the set of formal institutes and regulations

Defined
The subsystem of the project type ( )

Business
As a set of different organizational and legal forms of economic entrepreneurial activity, which is realized in order to profit The subsystem of the Process type ( )

Pc
Economy As a sphere of economic processes realization of production, consumption, distribution, exchange, including the results of their realization Note: the proposed location of the systems corresponds to the structure of their relationships in tetrad: systems having one common systemic feature interact directly with each other; systems whose features are opposite do not interact directly. and confirmed at the micro level. If it is confirmed at the macro level, this will also ensure the verification of the fundamental provisions of the SET.

METHODS
Of the three main methodological techniques, through which the verification of theoretical positions in economic research is carried out: verbal modeling, mathematical economics and econometrics, we have chosen the last one. It has been proved that econometrics based on the use of inductive statistics methods have far more advantages than others (Kim, 2006;Adams, 2012).
In our case, the econometric approach should be based on the intelligent processing of a large array of diverse data on the functioning of systems to identify non-obvious patterns of their functioning. The most commonly used term to name such data processing is data mining (Cios, 2007;Zaki, 2014). Knowledge here is usually understood to mean mathematical relationships between the parameters of the functioning of economic systems.

Data
A specific set of parameters for simulation of elements of socio-economic subsystems of Ukraine, was determined based on the composition of macroeconomic indicators obtained from: For simulation of each of the subsystems ten parameters were selected. All parameters are widely used for macroeconomic analysis, we have only made their selection and grouping by subsystems, ( Table 2). The observation period was determined on the basis of data availability and covered the time interval of 2000-2015.

Techniques of data analysis
A methodology similar to one, previously approbated at the micro level, at the microeconomic level was used, but somewhat corrected (Kravchenko, 2016(a); 2016(b)). It provides an index evaluation of the functioning of each of the subsystems, calculation of the level of their mutual balances and on their basis with the use of analytical geometry methods -computing the index of economic sustainability of the system. To verify the validity of the methodology and to confirm the hypothesis, the degree of correlation of the obtained index of sustainability with the value of GDP of Ukraine in dollar terms, as indicator that are traditionally used in the economic practice for the sustainability analysis, was determined.
An index evaluation of the functioning of each of the subsystems was determined on the basis of the normed values of the parameters by the formula of arithmetic mean: , , , To determine the level of economic sustainability of the system, it is expedient to use the opposite value -the difference between the maximum distance, corresponding to the abso- After calculating the index, we consider it expedient to determine the degree of its coherence with the value of the GDP of Ukraine on the basis of a correlation analysis.      The index estimations were used to calculate the index of economic sustainability of Ukrainian socio-economic system (Figure 4).

Analysis
The value of the index of economic sustainability fluctuated in the range of 0.68-0.97, while for the period, it increased by 12.6%.
From the graphs shown in Figure 2 and Figure 4, it is clearly evident that during the crisis periods there was a sharp decrease in both the index of economic sustainability and the index estimates of all subsystems.
In order to verify the validity of the methodology and to test the hypothesis, a correlation analysis of the index E values with the values of the nominal GDP of Ukraine was conducted. It revealed the existence of a direct close linear correlation with the probability of an errorfree forecast higher than 99.9% between values (Pearson correlation coefficient was 0.703).
We believe that the revealed correlations allow to confirm the proposed alternative hypothesis that the level of economic sustainability of the systems is determined by the level of their structural balance. In addition, we can conclude on the validity of the methodology used.

RESULTS
Our research did not reveal a strong direct dependence of the index of economic sustainability on the indicators traditionally used to reflect the dynamics of economic development of the country such as the level of innovation, investment and entrepreneurial activity, the volume of industrial production, exports, etc. Instead, a significant dependence on such indicators as the level of human development, education, as well as on indicators reflecting the influence of the state governance was revealed ( Table 2). It is concluded that on the one hand, this is a reflection of the irrational deindustrialized structure of Ukrainian socio-economic system, on the other -is a evidence of the country's involvement in the process of transformation into the knowledge economy.
The applied methodology allowed to identify the following structural patterns of development of the country, which determine the mechanism of its sustainability formation during the period 2000-2005: Its share has increased more than fourfold, from 8.2% to 34.5%. In both crisis years, in 2008 and in 2014, this subsystem became the strongest, dominant in the structure of the socio-economic system, most of its indicators (6 out of 10), reflecting the level of human and social development, education, society's homogeneity, demographic load and gender gap, demonstrated the desired dynamics. The exception were the indicators reflecting the economic characteristics of the populationunemployment, level of economic activity, labor force index, load per vacancy ratio, which seems logical. The correlation between the index of economic sustainability E and ISo was also strong (Pearson correlation coefficient was 0.703). In our view, this, as well as the upward trend of ISo graph and an increase in the share of So subsystem in the overall structure of system, is a clear econometric confirmation of the strengthening of the role of the population in ensuring the sustainability of the socio-economic system. The revealed tendency shows that human capital determines the development of the socio-economic system of the country, causes growth, and does not allow catastrophic reduction of macroeconomic indicators in crisis periods. Its share has increased more than three and a half times, from 7.7% to 28.6%. Despite the fact that the index estimation IEn was the highest in the period 2005-2008 and most of its indicators (8 out of 10) reached their maximum at that time, the share of the subsystem in the overall structure increased gradually throughout the period and reached its maximum in 2015. During the crisis periods, this subsystem had the second highest share in the overall structure of the socio-economic system. The correlation between the index E and IEn was strong (Pearson correlation coefficient was 0.85). In our view, the parabolic trend of IEn graph with the maximum of 2006, and an upward-increase in the share of En in the overall structure are econometric confirmations of the decline in the quality of state regulation of economic processes in the country, but enhancing its role in ensuring sustainability. In fact, the second trend is evidence of an decrease of the socio-economic system capacity for self-organization and self-sustainability. The development of the system is provided at the expense of political influence, which, however, is not enough efficient.

4.3.
Decrease in the share of the process subsystem, which reflects the characteristics of the sphere of implementation of the main economic processes Its share has decreased almost threefold, from 44.5% to 14.9%. In both crisis years, in 2008 and in 2014, this subsystem became the weakest, peripheral in the overall structure, most of its indicators (in 2008 -6 out of 10, in 2014 -all) reduced its value. This is generally logical and can be explained. The correlation of the index E with I Pc was very weak and inverse (Pearson correlation coefficient was -0.15). We believe this is an indication that ensure the sustainability of socio-economic system of the country was carried out not because of, but in spite of economic development and the development itself had destructive character. Kleiner (2013) notes that the development of subject-object and environment systems mainly is evolutionary (due to their unlocalization in time) and the development of process and project sys-tems is a cyclic (due to their localization in time -auth.). The revealed patterns of an increase in the shares of So and En subsystems reflect the tendencies of their evolutionary development, and a decrease in the shares of the Pc and Pj subsystems reflect the tendencies of decay of industrial and economic systems formed by the previous industrial structure, the final exhaustion of their potentials, as a consequence -the completion of their lifecycles.

Decrease in
4.6. In crisis periods 2008-2009 and 2014-2015 the proportionally similar structure of socioeconomic system was formed Against the background of a sharp decrease in the share of the process subsystem, an increase in the share of the subject-object subsystem was observed, which resulted in the following relation: .

II II > >>
It should be noted that in pre-crisis periods the structure of the economic system was different. This allows to assume with a certain degree of probability that the mechanism of avoiding the crisis within the system is similar and structurally identical. 4.7. The total shares of two pairs of directly interacting subsystems -the subject-object and the project, on the one hand, and the environment and process, on the another, fluctuated in the range of 50 ± 10% We believe that the revealed structural feature demonstrates the presence of a compensatory mechanism for maintaining spatial sustainability within the socio-economic system (in more detail, the formation mechanism for the spatiotemporal sustainability is described in Voitko (2017). At the same time, the total share of the subject-object and project subsystems gradually increased during the period from the lower to the upper limit, and the total share of the environment and process subsystems decreased.

CONCLUSION
The results of empirical testing of the methodology developed by us have shown that it meets all of the requirements for scientific methods: it is valid, comprehensive, diagnostic, reliable and representative.
The research carried out on its basis has made it possible to identify a number of interesting, previously not formalized and therefore scientifically significant systemic and structural patterns of the development of the national socio-economic system and to better understand the formation mechanism of its economic sustainability in different periods. It has been formally determined that this mechanism varies according to trends of socio-economic development of Ukraine, which may be clearly defined. They are: gradually increasing the impact on sustainability of non-economic components of socio-economic system (political, social and cultural), against reducing the impact of economic components (industrial and commercial); the presence of a compensatory mechanism for maintaining spatial sustainability of the system; its similar structure in crisis periods.