Cluster analysis of sub-federal bonds: how budgetary security affects the profitability of regional borrowing

Abstract

Subject. Economic relations related to regional borrowing through sub-federal bonds and the formation of their profitability. Purpose. Assessment of the correlation between the profitability of sub-federal bonds and the level of budgetary security in Russian regions. Materials and Methods. The article is based on a systematic approach that allows for the study of regions and the financing of regional development using sub-federal bonds as a system. The methods of content analysis, best practices analysis, comparative analysis, and statistical analysis are used. The task of clustering regions is set, which is solved using the k-means cluster analysis method. MS Excel 2024 and Python libraries are used for statistical analysis. Scientific novelty of the research. Solving the problem of clustering Russian regions using the k-means cluster analysis method and developing the structure of the regional distribution matrix according to the yield of regional bond issues and the level of budget security. Results. The negative correlation between the profitability of regional bond issues and the level of regional budgetary security has been confirmed: the lower the budgetary security of a region, the higher the profitability of its bonds, which reflects increased risks. However, there are a few regions that are included in both low- and medium-profitability clusters, indicating the need to consider additional factors such as debt burden, sectoral structure of the economy, and debt management quality in further research. For regions with high budgetary security, sub-federal bonds can provide cheaper financing for regional projects. However, for regions with low budgetary security, high bond yields create additional risks. Conclusions. The instrument in the form of sub-federal bonds is effective for regions with high budget security and will be beneficial for attracting cheaper financing to regional projects, however, for regions with low budget security, high bond yield rates create additional risks. The results of the study can be used to optimize the debt policy of the subjects of the Russian Federation, increase the investment attractiveness of regional bonds and reduce the cost of borrowing.