New Resonance Approach to Competitiveness Interventions in Lagging Regions: The Case of Ukraine before the Armed Conflict

Abstract

Regional competitiveness is considered to be an alternative basis for the determination of regional interventions. However, the composite competitiveness indicator is quite sensitive to the weights of sub-indicators, no matter what methodology is being used. To avoid this uncertainty in the determination of regional interventions, we proposed a new non-compensatory resonance approach that is focused on the hierarchical coincidence between weaknesses of NUTS 1 and NUTS 2 regions measuring the extensive and intensive components of competitiveness. Such a coincidence, being perceived as a resonance effect, is supposed to increase the effectiveness of interventions triggering synergetic effects and stirring up local regional potentials. The components of competitiveness are obtained through synthesising DEA methodology and Hellwig's index, correspondingly focusing on the measurement of technical efficiency and resource level. In analysing Ukrainian regions, no correlation between resonance interventions and the composite competitiveness indicator or GDP per capita was found, pointing toward a completely different direction in resonance approach. In western Ukraine, the congestion of six NUTS 2 regions was defined as a homogeneous area of analogous resonance interventions focused on improving business efficiency.