Analysis of regional development disparities in Ukraine using fuzzy clustering

Abstract

Disparities in the development of regions in any country affect theentire national economy. Detecting the disparities can help formulate the propereconomic policies for each region by taking action against the factors that slowdown the economic growth. This study was conducted with the aim of applyingclustering methods to analyse regional disparities based on the economicdevelopment indicators of the regions of Ukraine. There were considered fuzzyclustering methods, which generalize partition clustering methods by allowingobjects to be partially classified into more than one cluster. Fuzzy clusteringtechnique was applied using R packages to the data sets with the statisticindicators concerned to the economic activities in all administrative regions ofUkraine in 2017. Sets of development indicators for different sectors of economicactivity, such as industry, agriculture, construction and services, were reviewedand analysed. The study showed that the regional cluster classification resultsstrongly depend on the input development indicators and the clustering techniqueused for this purpose. Consideration of different partitions into fuzzy clustersopens up new opportunities in developing recommendations on how todifferentiate economic policies in order to achieve maximum growth for theregions and the entire country.