Financial determinants of ensuring the resilience of Ukrainian regions
-
DOIhttp://dx.doi.org/10.21511/imfi.20(4).2023.08
-
Article InfoVolume 20 2023, Issue #4, pp. 83-98
- Cited by
- 284 Views
-
88 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Financial resilience is the basis of economic development as it determines the ability of the financial system to efficiently perform its functions and ensure optimal resource allocation and the normal course of economic processes under the impact of macroeconomic shocks and endogenous risks. The article aims to assess financial resilience as a systemic component of ensuring the economic development of Ukrainian regions. The research methods include systemic and structural analysis (building an information and analytical model for studying financial resilience), clustering (grouping regions by the criterion of economic development), and risk theory and analysis of variance (identifying potential zones of financial resilience and its components). Data from the regions (oblasts) of Ukraine for 2015–2021 serve as the information and analytical basis of the study. The article reveals that in 2021 regions with better financial resilience (Zhytomyrska, Dnipropetrovska, Kyivska, Lvivska, Odeska, Kharkivska, Cherkaska, and Volynska oblasts) take leading positions in terms of economic development and more efficient use of exogenous and endogenous financial resources than the regions with low financial resilience (Chernivetska, Vinnytska, Khmelnytska, Donetska, Ternopilska, and Ivano-Frankivska oblasts). The study proves that enhancing financial resilience is a trigger and foundation for ensuring economic growth in the regions, especially amid macroeconomic shocks. Balancing the need to use financial resources to restore the economy (growth of production, consumption, and employment) while reducing the dependence of regional economies on external financial sources should become the main vector of policy to ensure the financial resilience of Ukrainian regions.
Acknowledgments
The study was conducted within the framework of the “Financial Determinants of Ensuring Economic Growth of Regions and Territorial Communities based on Behavioral Economics” project (No. 2020.02/0215) funded by the National Research Foundation of Ukraine (Competition “Support for Research of Leading and Young Scientists”).
- Keywords
-
JEL Classification (Paper profile tab)О18, Е62, С40
-
References31
-
Tables2
-
Figures4
-
- Figure 1. Empirical indicators of financial resilience of Ukrainian regions in the projection of groups with different development levels, %, 2015–2021
- Figure 2. Financial resilience – economic development of Ukrainian regions, 2015–2020
- Figure 3. Financial resilience against the background of economic development of Ukrainian regions, 2021
- Figure 4. Clustering of regions: a system of “financial stability – macroeconomic shocks – development” criteria
-
- Table 1. Empirical indicators of economic development of Ukrainian regions: a compositional approach, 2015–2021
- Table 2. Financial resilience in the context of groups of Ukrainian regions with different levels of economic development: a structural approach, %, 2015–2021
-
- Boin, A., & Lodge, M. (2016). Designing resilient institutions for transboundary crisis management: A time for public administration. Public Administration, 94(2), 289-298.
- Christopherson, S., Michie, J., & Tyler, P. (2010). Regional resilience: Theoretical and empirical perspectives. Cambridge Journal of Regions Economy and Society, 3(1), 3-10.
- Deevy M., Hasler, A., & Lusardi, A. (2021). Financial Resilience in America. Report. Stanford Centre on Longevity. Global Financial literacy Excellence Center.
- Fratesi, U., & Rodríguez-Pose, A. (2016). The crisis and regional employment in Europe: What role for sheltered economies? Cambridge Journal of Regions Economy and Society, 9(1), 33-57.
- Folke, C., Carpenter, S. R., Walker, B., Scheffer, M., Chapin, T., & Rockström, J. (2010). Resilience thinking: Integrating resilience, adaptability and transformability. Ecology and Society, 15(4), 299-305.
- Gajewski, P. (2023) Regional resilience to the Covid-19 shock in Polish regions: how is it different from resilience to the 2008 Global Financial Crisis? Regional Studies, Regional Science, 9(1), 672-684.
- Giannakis, E., & Bruggeman, A. (2017). Determinants of regional resilience to economic crisis: A European perspective. European Planning Studies, 25(8), 1394-1415.
- Hernández Rosario, A. C. (2022). Regional policy brief on building urban economic resilience during and after COVID-19 in Latin America and the Caribbean. Project Documents (LC/TS.2021/172), Santiago. United Nations. Economic Commission for Latin America and the Caribbean (ECLAC).
- Holling, C. S. (1973). Resilience and stability of ecological systems. Annual Review of Ecology and Systematics, 4, 1-23.
- Hill, E., Clair, T., Wial, H., Wolman, H., Atkins, P., Blumenthal, P., Ficenec, S., & Fiedhoff, A. (2012). Economic shocks and regional economic resilience. In Urban and Regional Policy and Its Effects: Building Resilient Regions (pp. 20-21). Washington, DC: Brookings Institution Press.
- Ilyash, O., Smoliar, L., Lupak, R., Duliaba, N., Dzhadan, I., Kohut, M., & Radov, D. (2021). Multidimensional analysis and forecasting the relationship between indicators of industrial-technological development and the level of economic security. Eastern-European Journal of Enterprise Technologies, 5(13 (113), 14–25.
- Kitsos, A., Carrascal-Incera, A., & Ortega-Argiles, R. (2019). The Role of Embeddedness on Regional Economic Resilience: Evidence from the UK. Sustainability, 11, 3800.
- Li, M., & Wang, X. (2022). How Regions React to Economic Crisis: Regional Economic Resilience in a Chinese Perspective. SAGE Open, 12(4).
- Linnenluecke, M. K. (2017). Resilience in business and management research: a review of influential publications and a research agenda. International Journal of Management Review, 19(1), 4-30.
- Lupak, R., Boiko, R., Kunytska-Iliash, M., & Vasyltsiv, T. (2021). State management of import dependency and state’s economic security ensuring: New analysis to evaluating and strategizing. Accounting. 855-864. 10.5267/j.ac.2021.1.023.
- Mahul, O., Signer, B. L., Hamada, H., Gamper, C. D., Xu, R., & Himmelfarb, A. (2019). Boosting Financial Resilience to Disaster Shocks: Good Practices and New Frontiers. World Bank Technical Contribution to the 2019 G20 Finance Ministers’ and Central Bank Governors’ Meeting. Washington, D.C.: World Bank Group.
- Martin, R. (2012). Regional economic resilience, hysteresis and recessionary shocks. Journal of Economic Geography, 12(1), 1-32.
- Mayor, M., & Pamos, R. (2020). Regions and Economic Resilience: New Perspectives. Sustainability, 12(11), 4693.
- Mcknight, A., & Rucci, M. (2020). The financial resilience of households: 22 country study with new estimates, breakdowns by household characteristics and a review of policy options. CASE/219. Centre for Analysis of Social Exclusion, London School of Economics, May.
- Oprea, F., Onofrei, M., Lupu., D., Vintila, G., & Paraschiv, G. (2020). The Determinants of Economic Resilience. The Case of Eastern European Regions. Sustainability, 12, 4228.
- Russell, R., Kutin, J., & Marriner, T. (2020). Financial capability research in Australia (86 p.). RMIT University, School of Economics, Finance & Marketing.
- Sreenivasan, A., & Suresh, M. (2023). Readiness of financial resilience in start-ups. Journal of Safety Science and Resilience, 4(3), 241-252.
- Steccolini, I., Jones, M., & Saliterer, I. (2017). Governmental Financial Resilience: International Perspectives on How Local Governments Face Austerity. Public Policy and Governance, 27. Emerald, UK.
- Upadhaya, B., Wijethilake, C., Adhikari P., Jayasinghe K., & Arun T. (2020). COVID-19 policy responses: reflections on governmental financial resilience in South Asia. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 825-836.
- Vega, S. H., & Elhorst, P. (2014). Modelling regional labour market dynamics in space and time. Papers in Regional Science, 93(4), 819-841.
- Voznyak, H., Kaplenko, H., Koval, V., Druhova, V., & Mulska, O. (2023). Financial self-sufficiency of Ukrainian territorial communities and local economic development: Modeling the causal relationship. Public and Municipal Finance, 12(2), 17-31.
- Voznyak, H., Mulska, O., Kloba, T., & Kloba, L. (2021). Assessing and strengthening budgetary security of regions and their amalgamated hromada in an unstable economy: A case for Ukraine. Public and Municipal Finance, 10(1), 138-150.
- Voznyak, H., Mulska, O., Patytska, Kh. & Radelytskyy, Y. (2022). Financial imbalances and their impact on the development of Ukrainian regions in economic instability. Financial and Credit Activities: Problems of Theory and Practice, 1(42).
- World Bank. (2022). World Development Report 2022: Finance for an Equitable Recovery. World Development Report.
- World Bank. (2023). Financial Resilience against Climate Shocks and Disasters: Recent Progress and New Frontiers. World Bank Technical Contribution to the 2023 G7 Finance Track under Japan’s Presidency.
- Webber, D., Healy, A., & Bristow, G. (2018). Regional growth paths and resilience: A European analysis. Economic Geography, 94(4), 355-375.