Methodological Procedures for the Identification of Economically Weak Regions of the Czech Republic

This thesis is focused on economically weaker territories of the Czech Republic at the level of Local Administrative Units (level LAU 1), and the way they are defined using chosen indicators. The European Union (EU) provides subsidies to disadvantaged regions within regional policy and in the case of the Czech and Slovak Republics it was found that more than a third of public support in the EU regional policy programs was spent on projects which would have been realized even without this support. (Šipikal, 2013). The question that arises is Are subsidies really needed? The main aim of this thesis is to design a comprehensive methodology according to which the disparities between regions can be determined and information can be given whether the region is economically weak or not. Furthermore, the intention is also to identify the key factors that may represent major problems in these areas. Considered variables are set according to the Regional Development Strategy of the Czech Republic document and methodologies of selected regions. For easier interpretation, the regions will be divided into homogenous groups through adequate procedures of cluster analysis. An aggregate indicator will be constructed based on the conducted calculations, which will allow characterization of the economically weak regions both in terms of border regions, which are specific, and other regions as well. The regions in the border area have certain specifics and often fall into the economically weak area, so therefore will be considered separately