Identifying Investment prioritiesof Services and Trading Sector in Bushehr Province

اقتصاد و توسعه منطقه ای

Article 4, Volume 22, Issue 10, March 2016, Pages 81-114   

Document Type: Research article

DOI: 10.22067/erd.v22i10.40695

Authors

atefe ahmadi^* ; Khadije Nasrollahi; Nematollah Akbari

University of Isfahan

Abstract

While one of the society basic needs in present conditions is in economic structures changes in order to create new job opportunities, it requires the identification of investment opportunities. Identifying the comparative advantage of economic activities in different areas, provide the possibility of optimum resource allocation by local and foreign investors. According to the comparative advantage theory if the country produce a product cheaper relative to other goods, that country has comparative advantage in the production of such goods and so entering into the international trade can benefit the country from the issuance of the goods where comparative advantage has been revealed. For a long time in economic analysis, particularly in the area of international economic analysis the regional dimension of activities has been ignored. But during the 1970s, a new field of science known as economic geography was formed. The main focus of this major is on identifying the dynamic of activity location with respect to the factors determining the geographical location and strongly was influenced by neoclassical economic theory. In this regard, the geographic location and climatic conditions of Bushehr province, creates some potential capacities in the development of the service sector in some context.
With regard to the importance of the service and trade sector globalization through foreign direct investment, in this study, using the indices of location quotient in the process of identifying the local economy possibilities, the local economy is compared with a reference palace and the needed indices are calculated. That is, each index is calculated as the ratio of the same index value for Bushehr province and Iran as a whole. Then, using a combination of factor analysis and numerical taxonomy to determine priorities in the services sector and business investment in the province in the years 2005, 2007, 2009 and 2011 were used. In this study, with the activities homogeneity assumption, priorities based on selected indicators show the competitiveness of the activity. Thus in the experimental section to determine the competitive and prioritized activities the used indicators such as profitability (output input ratio, value creation, location coefficient based on value added and production per capita), the employment index (production employment share of workers index in each activities), performance indicators (inputs productivity, labor productivity and labor intensive using) are calculated using the quotient coefficient method, then by entering these indices into factor analysis environment, the score matrix was calculated, and using numerical taxonomy the distance matrix is composed . Then, with the homogeneity range calculation in each year in each stage, the activities which are heterogeneous with regard to other activities are omitted and prioritization of homogenous activities have been carried out.
With regard to this matter that identifying exiting opportunities can gradually expand the development in the economic and social well-being of the regions and areas with comparative advantages, the results indicate that the province's water transport services sector in 2005, this indicates the existence of internal competitive advantage of these activities in the province in this year. That is many goods and raw materials export and import happen more quickly and at lower cost because of the province open access to the Persian Gulf Sea. In 2007 road transport services, according to the reason for the entry and exit of the requirement goods from customs and special economic zones in the province of Bushehr, the transfer of goods to other parts of the country has relative advantage to other activities with utmost efficiency. In 2009 air transport according to the same reasons and in 2011 the service sector has the greatest comparative advantage in private residential houses. The reasons for the existence of such a phenomenon can be job opportunities created by the atomic power plant, South Pars, the oil company, the Bureau of the province's ports which intense immigration to the province and increased demand for non-residential and residential constructions and departments of transportation services and the lake and deficiency of suitable soils for the construction of commercial and residential units in this province. On the other hand, it is worth noting that the job opportunities existence provide an upgrade competitive advantage of the insurance activity during 2005 and 2007, 2009 but in 2011 has been preset. The situation there due to macroeconomic conditions and high unemployment maintained in this province, which has caused many of entrepreneur lost their business and as a result the use of unemployed insurance services causes the reduced revenue for this services. This indicates that the province has the potential for such activities and strengthening and focusing on those activities is very important.
So we can say that the allocation of resources and investment in these activities and strengthen them is a priority in this province. According to the results of this study suggestions to the economic planners and policy makers are: 1. removing the barriers to the resources allocation and development of the activities that the province has advantage in them, 2. Given the importance of macroeconomic indicators in regional economic performance, authorities are recommended to pursue their actions in the path of economic stability, 3. Modified and revised statistical survey systems particularly regional statistical survey system to cover all aspects of the statistics and information required by researchers.

Keywords

Comparative Advantage; Services and Trading sector; Location Quotient; Numerical Taxonomy

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