Analysis of regional development disparities in Ukraine with fuzzy clustering technique

Abstract

Disparities in the development of regions in any country affect the entire national economy. Detecting the disparities can help formulate the proper economic policies for each region by taking action against the factors that slow down the economic growth. This study was conducted with the aim of applying clustering methods to analyse regional disparities based on the economic development indicators of the regions of Ukraine. There were considered fuzzy clustering methods, which generalize partition clustering methods by allowing objects to be partially classified into more than one cluster. Fuzzy clustering technique was applied using R packages to the data sets with the statistic indicators concerned to the economic activities in all administrative regions of Ukraine in 2017. Sets of development indicators for different sectors of economic activity, such as industry, agriculture, construction and services, were reviewed and analysed. The study showed that the regional cluster classification results strongly depend on the input development indicators and the clustering technique used for this purpose. Consideration of different partitions into fuzzy clusters opens up new opportunities in developing recommendations on how to differentiate economic policies in order to achieve maximum growth for the regions and the entire country.