Modeling the Investment Attractiveness of the Types of Economic Activities in the Region with the Use of the Matrix of Financial Flows

The relevance of the work is due to the increased need to improve the efficiency of the state investment policy against the background of limited external sources for financing investment processes. The goal of the paper is to develop methodological tools for assessing the impact of changes in the volume of investments in fixed capital on the economic growth of the regions for the purpose of identifying the types of economic activities that have the greatest impact in terms of national economic development. The novelty of our approach consists in the fact that we integrate two tools for assessing investment effectiveness: the Cobb-Douglas production function, which is used to calculate the growth of gross output as a result of commissioning of fixed assets; and the balance model, which shows the movement of financial flows in the region (matrix of financial flows) and which is used to calculate direct and indirect economic effects arising from investment activities. We calculate and analyze sectoral production functions for four regions with different specialization and level of socio-economic development – the Sverdlovsk, Vologda, Chelyabinsk and Kurgan oblasts; we also calculate the marginal return on capital in 16 types of economic activity. We build matrices of financial flows for the regions under consideration for the year 2016, on the basis of which we calculate four groups of sectoral multipliers, reflecting the impact of the growth of gross output in individual industries on the aggregate growth of gross output (in the economy of the region as a whole), value added, household income and consolidated regional budget revenues. The paper shows that the cumulative effect manifested in growing GRP and tax revenues of the regional budget due to the growth of fixed capital, depending on the industry, may differ several times. Our study identifies statistical anomalies that indicate significant flaws in the data available; this fact prevents us from obtaining more accurate results. The approach we have developed and the results we have obtained can be used by the authorities to work out investment policy, taking into account the regional sectoral specifics of multiplicative economic effects