Method for Monitoring of Managing the Modernization of Regional Economy

This paper proposes a new approach for monitoring of managing the modernisation of regional economic. The model built on proposed methodology will make it possible to smooth out the influence of non-urban areas on the unevenness of economic activity in spatial development. This paper has two goals. The first is to provide a new compilation of data on spatial distribution of economic activity at the sub-regional level. This data set allows us to monitoring of different indicators within macroregions such as Siberia. The second goal is to construct an instrument that helps to overcome the endogeneity problem using new economic geography hypothesis about the mechanisms of distribution of economic activity. Section 2 describes the data and method that we have proposed, discusses the construction of the Theil indexes using these data at the sub-federal and the sub-regional level. Section 3 presents the correlations between spatial distribution of economic activity and local market potential, discusses the robustness of the results; and the last section concludes.