Identification Concentrated Industrial Activities with Comparative Advantage Export and Determination of Target Markets

اقتصاد و توسعه منطقه ای

Article 4, Volume 30, Issue 25, June 2022, Pages 103-139   

Document Type: Original Article

DOI: 10.22067/erd.2023.80494.1164

Authors

atefe ahmadi^{* 1}; Abdol Karim Hosainpour²

¹Department of Economics, Persian Gulf university of Bushehr, Bushehr, Iran.

²PhD of International Economics

Abstract

 
1- INTRODUCTION
   The expansion of trade among countries in recent years is one of the main reasons for economic growth. In order to achieve export development, it is necessary to use a principled and modern method to identify, determine and prioritize export target markets. In this regard, Bushehr province in the economic field (production, trade and services) with issues such as growth based on a single product and sector economy, weak technical and specialized knowledge in economic sectors, traditional production methods and lack of investment platforms in the sectors private and public aspect. Therefore, in the present research, in order to develop non-oil exports at the regional and national levels, by benefiting from the theories of comparative advantage, the activities with comparative advantage in export in Bushehr province are identified.
 
2- THEORETICAL FRAMEWORK
    Based on different theories in the field of comparative advantage, countries or regions being rich in resources cause countries (regions) to have a potential relative advantage for exporting manufactured goods related to resource abundance. Also, the export of goods should be based on the trade costs and market size of the target countries. Therefore, according to the proposed theories, the export of goods based on the comparative advantage and the concentration of companies in a geographical area, while enjoying the benefits of forming an industrial cluster, causes the organization of industries and the specialization of activities.
 
3- METHODOLOGY
    In this research, the cluster index method is used to investigate the concentration of industrial activities in the province. Due to this issue comparative advantage is one of the key concepts in international trade theory, and also one of the indicators that has been widely used in this field is the Balasa Revealed Comparative Advantage Index. After identification of the concentrated activities through the Balasa index and Balasa symmetry, the concentrated industrial activities with relative export advantage are identified and then based on a series of indicators, the target countries of Bushehr province are prioritized by using the numerical taxonomy method.
 
4- RESULTS & DISCUSSION
   In the recent research, by benefiting from the theories of comparative advantage and using indices such as cluster index, Balassa index and Balassa symmetry index, concentrated industrial activities were identified and then has been determined the activities with comparative advantage in exports in the years 2005 to 2019. In the following, considering the importance of non-oil export development based on five relative import indicators, the number of countries participating in imports, the lack of advantage of the target country in product production, the average tariff and the distance between the target country and Bushehr province using the numerical taxonomy method of the most important markets were identified as the target of the selected product in the last statistical year (2021). According to the results obtained in the recent research, the activity of producing chemicals and chemical products has a relative advantage of export. Also, based on the final prioritization of the countries based on all the introduced indicators, it was determined that the countries of Turkmenistan, Tajikistan, Kyrgyzstan and Qatar are the most important target countries for the chemical products of Bushehr province, respectively, they have the first to fourth priority.
 
5- CONCLUSIONS & SUGGESTIONS
   Bushehr province has opportunities and strengths in various fields of oil, gas, petrochemicals, power plants, agriculture and fisheries, mines, nuclear facilities, marine industries, commercial activities and proximity to the Persian Gulf. The results of calculating the cluster index indicate that each city in Bushehr province has a series of concentrated activities. Each of these activities can be susceptible to the formation of industrial clusters with a more detailed investigation. The results obtained from the calculations of revealed and revealed symmetric relative advantage indicators based on the statistics of added value and export of activities also showed that among the concentrated activities susceptible to cluster formation in Bushehr province, the activity of coke production and oil refining products; production of chemicals and chemical products. The production of pharmaceuticals and chemical and herbal medicinal products has a relative advantage in export. In addition, the results of the prioritization of the target countries showed that the countries of Turkmenistan, Tajikistan, Kyrgyzstan and Qatar are the most important target countries for the chemical products of Bushehr province. According to these results, it is suggested:

It is possible to form an industrial cluster in the production of chemical substances and chemical products in Asaluiye city.
Regional imbalances caused by the concentration of population and facilities in a province occur within a region, which are reduced by identifying and developing susceptible areas.

Keywords

: Regional Planning; Comparative Advantage; Export; Cluster Index; Target Market

References

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