Investigating and Prioritizing the Effective Factors on Business Environment in Golestan Province Using AHP Method

اقتصاد و توسعه منطقه ای

Article 5, Volume 26, Issue 17, November 2019, Pages 127-150   

Document Type: Research article

DOI: 10.22067/erd.v26i17.74581

Authors

Mohsen Mohammadi Khyareh^{* 1}; Nasrin rostami²

¹Gonbad-e Kavous

²Gonbade- Kavous

Abstract

Introduction:
  The existence of an appropriate business environment and the need to identify the factors affecting the business environment to improve the national production process and create new economic capacity is undeniable. Therefore, the present study aims to prioritize factors affecting the business environment in Golestan province. The favorable business environment has a significant impact on the attraction of domestic and foreign investment, employment and GDP growth (Bakhteiari and Shayesteh, 2012). The unfavorable business environment in Iran compared to other countries reduces the possibility of the presence of investors and economic activists in the country, and this can ultimately create a huge gap between Iran and developing countries (Zali et al., 2015). Thus, paying attention to the business environment and removing environmental barriers is vital in Iran. Furthermore, due to geographical location, natural resources, and agriculture in Golestan province, as well as the ways of communication with the tourist from Mashhad, sports and the existence of ethnic and cultural diversity in the province, there is a vast business capacity in this area. In addition, unlike some Gulf States, Iran is stretched geographically and each region has certain requirements that should be considered in any credible evaluation.
Research background
In the case of Iran, there are only a few researches at the provincial level that study the factors that affect the business environment, including Midri et al. (2013), Gerivani and Ahmadi (2016), and Paaseban et al. (2015). The present study is the first one to prioritize effective factors on the business environment of Golestan province. In the same line, foreign researchers such as Klapper and Love (2011), using panel data in 92 countries, looked at the impact of business environment reforms on the entrance of new companies. In addition, Djankov et al. (2006), by examining the relationship between business regulations and economic growth in 135 developing countries, concluded that better-regulated countries had faster growth compare to disruptive regulations. Furthermore, Hanusch (2012) found that time and cost as factors affecting economic growth and considers the flow of investment necessary to improve the business environment.
Research method
The present study aims to prioritize factors affecting the business environment in Golestan province. For this reason, a questionnaire was submitted to a sample in the form of pairwise comparison and Analytic Hierarchical Process (AHP) method, and the weight of each of the criteria was obtained through the Expert Choice hierarchical analysis software. The AHP method is one of the most famous multi-purpose decision-making techniques first developed by Saaty in the 1980s. This model, which is one of the most important multi-criteria decision-making techniques, is used to decide on very complex issues (Saaty, 1980, Narasimhan and Vickery, 1988).  
Findings
The findings of this study showed that the national and provincial factors, including decreasing government size, reducing restrictions on foreign investment attraction regulations, enforcing laws and regulations, and the power of influence by the competent people for each specialty, are priorities of the first to fourth. Factors for decreasing exchange rate fluctuations and ease of access to financial resources ranked fifth and sixth among the factors. Classification in the cost minimization criterion, as well as the ability to predict the government's economic policies in the speed criterion in conducting the business process ranked seventh and eighth among all factors. Other factors have gotten the next priorities. The ease of doing business also has the highest priority over cost minimization and the speed of doing business processes. The results of the research can affect the immediate attention and promptness of planners and policymakers to the basic priorities of the business environment in the national and provincial areas. In addition, the results of this study will be effective in continuously monitoring the business environment of the province, comparing it with other provinces and national indicators, and determining medium and long-term goals for promoting business environment indicators.
 

Keywords

business environment; Hierarchical Analysis Process (AHP); Golestan province

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