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In the context of the rapid development of digital technologies, increasing global instability, and the growing complexity of socio-economic processes, institutional factors play a decisive role in the transformation of regional economic systems, acting as a key mechanism for adapting territories to new challenges and opportunities. This article is aimed at a comprehensive study of the impact of the institutional environment on regional development in the context of digitalization, covering a wide range of factors, including regulatory and legal frameworks, the level of digital infrastructure development, the degree of integration of innovative technologies into the economy, as well as the effectiveness of interaction between public, private, and social institutions. Particular attention is paid to the analysis of digital transformation processes, which are becoming the fundamental basis for the modernization of regional economies, ensuring increased productivity, reduced transaction costs, the development of new forms of employment, and the creation of innovative business models. The paper examines key manifestations of global instability, such as economic crises, geopolitical tensions, changes in global supply chains, technological competition, and increasing uncertainty in global markets, as well as their impact on the sustainability and dynamics of regional development. It is substantiated that institutional mechanisms, including strategic planning, state support for digitalization, human capital development, the formation of a favorable investment climate, and the implementation of flexible management models, form the basis for increasing the competitiveness of regional economic systems. The article also provides practical recommendations for improving institutional policy aimed at enhancing regional adaptability, developing an innovative environment, and forming sustainable economic structures capable of functioning effectively under conditions of high uncertainty and constant change. The results obtained emphasize the need for a systematic approach to the transformation of regional economies, within which digitalization is considered not only as a technological process but also as an institutional phenomenon requiring comprehensive support from all participants in the economic system.
Institutional factors, regional economic systems, digitalization, global instability, economic transformation
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