Measuring the Comparative Advantage of Economic Activities in Guilān Province: The Approach of the Basic Economy Model and the Shift Share Model

Document Type : Research Article - Case Study

Authors

1 PhD Student In Urban Economics, Department of Economic Development and Planning, University of Tabriz , Tabriz, Iran.

2 Professor, Department of Economics Development and Planning, University of Tabriz , Tabriz, Iran.

Abstract

Considering the limited available resources, in the field of regional economy, knowing the characteristics and economic advantages of each region provides the possibility of better planning in order to achieve development goals. Therefore, this study aimed to analyze the comparative advantage of different economic sectors in Guilān province in 2014, 2016 and 2018, analyze the competitive advantage of sectors and determine the value added of sectors in Guilān province compared to the country during 2014-2016. For this purpose, the basic economy model and spatial coefficient index and shift share model were used. The results of the study showed that Guilān province in 2016 and 2018 has a relarive advantage in the agricultural sector and is in the field of economic activity and has a potential advantage for economic growth. Sectors related to agriculture, construction, wholesale, retail, vehicle and goods repair, food and shelter service activities, administrative and support services, public affairs and municipal services, and education have a competitive advantage and have undergone an upward trend in the years under study. The results of the share change model show that in the sector related to agriculture and service activities related to financial and insurance activities, Guilan province has the best performance in the country, but in the sector related to professional and scientific activities, the country has a better performance than Guilān province.
 
Extended Abstract
Introduction
The study of regional economic structure is useful for explaining changes in regional economics, predicting the consequences of economic decisions, and future planning. The economy of a region mainly depends on the strength and weakness of various economic sectors in it, the dynamics of the industrial structure, and the unique regional factors. Although paying attention to macro policies in regional policies is accepted as a general principle, this does not mean that what is appropriate at the national level will be profitable for all regions. Therefore, ignoring the facilities, capabilities and comparative advantages of the region in the field of economic activities has caused investments not to be equivalent with the capacities of the regions. In this regard, the use of analytical models of spatial coefficients, shift share, data-output techniques, regional coefficients of the basic economy and ranking prioritization, provides the basis for examining the effect of different economic activities and their comparative evaluation to determine the opportunity and improving the performance of the regional economy structure. Guilān province is one of the northern provinces of Iran; despite having rich natural resources, climate diversity, abundant water, vast plains, young workforce, abundant tourism capabilities, in recent years, it has not been able to gain a proper share of the national economy in proportion to their capabilities and opportunities. Therefore, in the present study, we first sought to evaluate the comparative advantages in different economic sectors in Guilān province based on the LQ index (spatial coefficient); because recognizing the comparative advantage of a province in the field of economic activities is the most important link in the development process that provides the possibility of job creation. Then, through the shift share method, the value added situation of major sectors and groups of economic activities in Guilān province was analyzed compared to the country during the years 2014-2018.
Methodology
The present study was an applied research in terms of purpose and analytical-descriptive research in terms of information analysis. The required statistical data was collected from the statistical yearbooks section of the Statistics Center of Iran using the library method. The statistical population of this study was Guilān province in 2014, 2016 and 2018. The measurement tools of the present study were the basic economy model and spatial coefficient index and the shift share model.
Results and discussion
In the studied years, except for the mining sectors, industry, electricity supply, steam and air conditioning, information and communication, service activities related to financial and insurance activities, professional and scientific activities, administrative activities and Support services, other departments are evaluated as basic. It is noteworthy that in the three years under study, there was no change in the basic or non-basic part of the department, so that if a part was evaluated as a non-basic part in 2014, the non-basic part was evaluated in 2018. The sectors of mining, industry, electricity supply, steam and air conditioning, information and communication, service activities related to financial and insurance activities and professional and scientific activities due to being non-basic in 2013 and 2017 have been evaluated as sectors without competitive advantage. Transportation, warehousing and post sectors and activities related to human health and social work have been evaluated as sectors with a fixed competitive advantage over time; because the value of spatial coefficient has been almost constant during the studied period. The results of the shift share model showed that the growth rate of the country's economy as a whole (A) is 1.04. The structure of the country's economic sectors (B) in different sectors of activity showed the rise of agriculture, hunting, forestry and fishing sectors, industry, mining, electricity supply, service activities related to financial and insurance activities and professional and scientific activities. In the meantime, the sector related to electricity supply and financial and insurance activities has performed better. Also, in the analysis of the performance element of each sector in the province (C), service activities related to financial and insurance activities have the highest positive coefficient and real estate has the highest negative coefficient. It should be noted that in the sector related to agriculture and service activities related to financial and insurance activities, Guilān province performed better than the country, but in the sector related to professional and scientific activities, the country performed better than Guilān province.
Conclusion
Therefore, it is necessary for the provincial authorities to emphasize the spatial organization and geographical distribution of population and activities in accordance with the development plans, according to the relative advantages of each region. They should adopt their strategies and policies by identifying the basic sectors and activities that have a relative advantage in such a way that the priority is to invest in the basic and main activities. So that the support policies are directed towards these activities in order to achieve the economic growth of the regions. Considering that Guilan province has a relative advantage in the sector related to agriculture, it is necessary for provincial officials to pay attention to this sector.
Funding
There is no funding support.
Authors’ Contribution
All of the authors approved the content of the manuscript and agreed on all aspects of the work
Conflict of Interest
Authors declared no conflict of interest.
Acknowledgments
We are grateful to all the persons for scientific consulting in this paper.

Highlights

- Guilan province performs better in economic activities related to agriculture and financial and insurance activities than the country.

- Gilan province has a relative advantage in the agricultural sector.

Keywords

Main Subjects

References

Abedin Darkoush, S. (1993). Urban Economics Review. Central University Press. [In Persian]
Aghamohammadi, S. N., Haji, G. h. A., and Ghafari, H. (2021). Measuring the Relative Advantage of Economic Activities in the Provinces of Iran: Location Quotient Approach. Journal of Regional Planning, 10 (40), pp. 35-52. [In Persian]
Akbari, N., Esmailpour, Y., and Sarkhoshsara, A. (2012). Analysis of employment status of major economic sectors in the cities of Kermanshah province during the period 1375-1385, Journal of Environmental Management, 6 (20), pp. 81-105. [In Persian]
Alhowaish, A. K., Alsharikh, M. A., Alasmail, M. A., and Alghamdi, Z. A. (2015). Location quotient technique and economy analysis of regions: Tabuk Province of Saudi Arabia as a case study. International Journal of Science and Research (IJSR), 4(12), pp.1756-1761.‏
Arabmazar, A., Khademian, S. (2013). Investment Priorities in the Agricultural Sector of Iran. Agricultural economics and development, 21(82), pp. 27-43. [In Persian]
Daei, B., Afshon, H. A. (2018). Structural Analysis of Employment in Different Economic Sectors of Fars Province during the Years of 1396-1392 and Its Forecast until 1400 (Years of the Eleventh and Twelfth Governments): Basic Economy Approach and Displacement-Share. Economic Journal, 9 & 10, pp. 71-96. [In Persian]
Faraji-Sabokbar, H. A., Hajari, B., Torabi, Z. A., and Bahremand, S. (2016). Spatial Analysis, Major EconomicActivities, Formula of Location Quotient (FLQ). Journal of Village and development, 19(3), pp. 139-159. [In Persian]
Farhoudi, R. A., Mohammadi, A. (2007). Analysis and Forecasting of Employment Situation in Sanandaj City Using the Change of Share of spatial Coefficient and Gini Coefficient. Geographical Research, 38(55), pp. 189-202. [In Persian]
Florence, P. S., Fritz, W. G., and Gilles, R. C. (1943). Measures of industrial distribution. Industrial Location and National Resources. Washington, DC: U. S. National Resources Planning Board.‏
Ghaffari-Fard, M., Khoshsima, R. (2016). Identification of the Driving Sectors in Job Creation in the Different Provinces of Iran and its Prospects (Shift-Share Approach). Journal of Fiscal and Economic Policies, 4 (14), pp.7-32. [In Persian]
Glasson, J. (1978). An introduction to regional planning: concepts, theory and practice. Hutchinson.‏
Guimarães, P., Figueiredo, O., and Woodward, D. (2009). Dartboard tests for the location quotient. Regional Science and Urban Economics, 39(3), pp. 360-364.‏
Hoen, A. R., Oosterhaven, J. (2006). On the measurement of comparative advantage. The Annals of Regional Science, 40(3), pp. 677-691.‏
Islam, F. B., Mubassirah, F. A., Siddiq, F., Hossain, D., Sharmin, N., and Haque, A. (2016). Economic growth analysis of six divisions of Bangladesh using location quotient and shift-share method. J Bangladesh Inst Plann, 2075, 9363.‏
Jahangard, E., Hosiani, N. (2013). Identifying Key Economic Sectors in Iran: A Stochastic Input-Output Analysis. Journal of Economic Modeling Research, 2(11), pp. 23-47. [In Persian]
Jahangard, E., Keshtvarz, V. (2011). Identifying the key sectors of Iran's economy: the new approach of network theory. Quarterly Journal of New Economy and Trade (QJNET), 25 & 26, pp. 97-119. [In Persian]
Jahangard, E., Naseriborocheni, A. R. (2017). Identification of Key Sectors in the Iranian Economy Using Fuzzy Clustering. Iranian Journal of Economic Research, 22(72), pp. 41-78. [In Persian]
Jumiyanti, K. R. (2018). Analisis Location Quotient dalam Penentuan Sektor Basis dan Non Basis di Kabupaten Gorontao. Gorontalo Development Review, 1(1), pp. 29-43.
Kaldor, N. (1970). The case for regional policies. Scottish journal of political economy, 17(3), pp. 337-348.‏
Layeghi, E., Ghasemi, P., and Bababi, N. (2013). A Study of Production and Employment Comparative Advantage in the Agriculture Sector of Iran Provinces. Review of Economic Issues and Policies, 12 (11 and 12), pp. 83-110. [In Persian]
Lee, J. (1995). Comparative advantage in manufacturing as a determinant of industrialization: the Korean case. World development, 23(7), pp.1195-1214.‏
Mo, S. W., Lee, K. B., Lee, Y. J., and Park, H. G. (2020). Analysis of import changes through shift-share location quotient and BCG techniques: Gwangyang Port in Asia, The Asian Journal of Shipping and Logistics, 36, PP. 145-156.
Myrdal, G., Sitohang, P. (1957). Economic theory and under-developed regions.‏
Niyimbanira, F. (2018). Comparative advantage and competitiveness of main industries in the north-eastern region of South Africa: application of location quotient and shift-share techniques. International journal of economics and finance studies, 10(1), pp. 96-114.
Niyimbanira, F., Eggink, M. E. and Niyimbanira, R. N. (2020). The Identification of the Key Sub-Industries among Coastal Metropolitan Cities of South Africa: An Application of the Location Quotient Technique. International Journal of Economics and Finance Studies, 12 (1), pp. 50-70.
Padilla-Perez, R., Villarreal, F. G. (2017). Structural change and productivity growth in Mexico, 1990–2014. Structural change and economic dynamics, 41, pp. 53-63.‏
Ranjbar-Fallah, M. R., Ranjbar-Peygan, M. (2011). Identifying the comparative advantages of Qazvin province in the industrial sector using the LQ index. Monthly Labor and Society, 10 (141), pp. 66-55. [In Persian]
Richardson, H. W. (1973). Regional growth theory. Macmillan.‏
Sadeghi-Shahdani, M., Ghaffary Fard, M. (2009). Review on Relative Advantage and Structure of Regional Growth Domestic Production in Provinces of Iran. Journal of Economic Research and Policy.17(50), pp.115-136. [In Persian]
Sarvar, H., Sarvar, R., Sarbaz Goli, S. (2018). Analysis of the employment status of major economic sectors city province of Ardabil. Journal of Regional Planning, 7(28), pp. 81-94. [In Persian]
Sepehrdoost, H., Barouti, M. (2015). Investigating the Problem of Employment and Sustainable Development Path by Share Change Analysis Method. Iranian Journal of Social Development Studies, 9(1), pp. 105-117. [In Persian]
Shi, C., Zhang, J., Yang, Y., and Zhou, Z. (2007). Shift-share analysis on international tourism competitiveness (A case of Jiangsu Province). Chinese Geographical Science, 17(2), pp. 173-178.‏
Sobhani, H., Darvishi, B. (2012). Investigating the comparative advantages and structural analysis of employment in Ilam province. Journal of Economic Research, (70), pp. 159-187. [In Persian]
Tiebout, C. h. (1956). Export and Regional Growth, Journal of Political Economy, 64, pp. 250-260.
Zangiabadi, A., Ahangari, S. h. (2012). Study of employment of economic sectors using share change model and spatial coefficient (LQ) (Case stady: city centers of West Azerbaijan province). Journal of Geography and Environmental Studies, 1(2), pp. 7-22. [In Persian]
Ziari, K. (2002). Urban land use planning. Yazd: Yazd University Press, third edition. [In Persian]

Files

Share

How to cite

Statistics