Time or Location: Which one is More Effective in Exploitation of Agricultural Processing and Complementary Industries?

اقتصاد و توسعه کشاورزی

Article 3, Volume 33, Issue 3 - Serial Number 45, September 2019, Pages 251-263   

Document Type: Research Article

DOI: 10.22067/jead2.v33i3.75213

Authors

R. Zahedian Tejeneki^* ; S.M. Mojaverian; S..A. Hosseini-Yekani

Sari Agricultural Sciences and Natural Resource University

Abstract

Introduction: The creation of agricultural processing and complementary industries is one of the ways to reduce poverty and unemployment in rural areas. Therefore, in order to encourage economic agents to create such industries, it is necessary to identify the affective factors on their decision. Information of the Agricultural Jihad Organization of Mazandaran province shows that the concentration of these industries in cities of Amol, Babol and Sari is more than other cities. In addition, the distribution rate of exploited processing industries is different from year to year. By considering the different rate of exploitation in years and locations, this question arises: Does location and time have any effect on exploitation of the agricultural processing and complementary industries in Mazandaran province? What is the contribution of these factors to the exploitation of processing industries?
Methods: To answer research questions, the data of 2572 exploited and unexploited units are collected from the Agricultural Jihad Organization of Mazandaran province. The status of exploitation of processing industries is a qualitative variable with two values ​​of zero and one. To determine the effect time in exploitation, the data are divided according to the Location and the commencing time of unit construction. The two-level Logit model is used for estimating model. In the estimated multilevel model, only intercept component is considered as a random component. Also, in this study, the Variance Partition Coefficient (Vpc) and the Likelihood ratio test is used to evaluate the multilevel model
Results: The value of the likelihood ratio statistic in commencing time of construction model is 330/72 that it indicates that two-level logit model is more suitable than the logit model for estimating data. The Variance Partition Coefficient shows that classifying processing and complementary industries based on the time of construction in Mazandaran province, can explain 28.37 percent of the observed deviation on average, which is not explained by independent variables in the model. While 1.2% of the observed deviation is explained by classifying the industries of Mazandaran province according to construction site. Also the share of location in the exploitation of the processing industries in Mazandaran province varies from 0.2 to 4.6%. In other words, the share of worst and the best location in terms of spatial characteristics are 0.2 and 4.6%, respectively. While the impact of the commencing time of construction in the exploitation of the processing industries of Mazandaran province varies from 19% to 40%. The results of the estimation model show that variables of cooperative ownership, planned capacity, unit area, establishment in the industrial parks, the amount of capital and type of activity effect on creation and exploitation the agricultural processing and complementary industries. Marginal effect of Horticultural activity variables, establishment in industrial parks and livestock activity, are more than other variables.
Conclusion: The results show unlike the high emphasis on location factor in locational studies, the share of this factor in construction and exploitation of the processing and complementary industries varies from 0.2 to 2.4 percent. One of the most important reasons for low share of the location factor can be attributed to the right choice of place for construction by entrepreneurs. The results of the two-level logit model indicate that the start time of construction unit explains 28.37 percent of the variation in the exploitation of the agricultural processing in the Mazandaran province. The best and worst time to start construction is 42% and 19% respectively in the exploitation of the processing industries. The high share of start time shows that if an economic agent starts a single unit at different times, the chance of exploiting from the unit varies in different times. The variability of the conditions creates a concept that is called time rendering, in which the success of the construction of processing industries is a function of the conditions of the start date and not the characteristics of applicants for these designs. Therefore, it is recommended to condition creation of new units and exploiting from existing half-unit (including inflation rates, exchange rates, facility rates, facility quantity and rules) to be equal over time. Which this goal would be achieved by adopting to policies and doing activities that are matched with time, trustees and authorities of country.

Keywords

Agricultural conversion and complementary industries; location; Time; Exploitation; Two-level logit; Mazandaran Province

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