UDC 332.1:330.4; JEL R11, R15, С33
Babets, I. H. (2026). Ekonometrychna otsinka chynnykiv strukturnykh transformatsiy promyslovosti Karpats'koho rehionu v umovakh viyny [Econometric assessment of determinants of industrial structural transformation in the Carpathian region in wartime]. Rehional'na ekonomika - Regional Economy, 121 (3), 38-52. DOI: https://doi.org/10.36818/1562-0905-2026-3-3 [in Ukrainian].
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Authors



Babets Iryna Heorhiyivna

Doctor of Economics, Professor

Senior Researcher of the Department of spatial development of the Dolishniy Institute of Regional Research of NAS of Ukraine; Professor of the Department of international economic relations and foreign languages of the Central Ukrainian National Technical University

Contacts: irina.babets@ukr.net

Webpages:

Resume

Purpose. The purpose of the article is to identify and econometrically evaluate the determinants of structural transformation in the industrial complex of the Carpathian region in wartime. Methodology. The study is based on the estimation of panel regression models, where the dependent variable is a vector of shares of individual industries in total industrial output, and the independent variables include indicators of foreign trade, capital investments, FDI, innovation activity, the labor market, and domestic consumption. Findings. Foreign trade factors were established as key drivers of growth in the shares of transport equipment manufacturing and electrical equipment manufacturing, confirming the significant integration of regional enterprises into European value chains. For electricity, gas, and steam supply, a substantial stimulating effect of high-tech imports was revealed, meeting the critical need of the sector for modern equipment to modernize power generating capacity and restore infrastructure. The statistical insignificance of investments and innovations for most medium- and high-tech industries (except the food industry) was identified, indicating that enterprises operate under contract assembly conditions relying on imported technologies amidst a capital deficit. The validity of the efficiency wage theory was confirmed: an increase in labor costs stimulates output in the food industry, furniture manufacturing, and equipment repair due to enhanced labor productivity. The impact of domestic consumption aligns with Engel’s law, highlighting the export orientation of most industrial branches in the Carpathian region. Originality. The study deepens the theoretical and methodological framework and provides empirical justification for the determinants of regional industrial structural transformation. It proves that analyzing the shares of individual industries is more informative than using an aggregated index, as it reveals not only the scale of inter-industry redistribution but also the qualitative direction of development for specific industrial sectors. Practical value. The strategic priorities for industrial policy were identified: transitioning from tolling operations to in-house R&D and dual-use technologies; developing industrial parks; implementing war risk insurance; adopting an efficiency wage model; and engaging local enterprises in reconstruction programs.

Keywords:

industrial structural transformation, Carpathian region, panel regression, determinants of structural shifts, exports, imports, investments, innovations, domestic consumption, employment