Gross Value Added Research Articles

Correlation Between Marketing Strategies and Financial Performance of Micro Small Medium Enterprises in Isabela, Philippines

Micro Small and Medium Enterprises (MSMEs) account for 99.56% of the economy. They employ 62.8% of the workforce, unfortunately they contribute only 35% of the Gross Value Added (GVA) and 25% of the Philippine export. They remain far less productive than large firms. Notwithstanding the high rate of entry into the entrepreneurship activity, the failure rate is the highest in ASEAN leading to very low established business rate. This study aims to determine the financial performance of MSMEs, the level of implementation of marketing strategies and the relationship that exists between the financial performance and marketing strategies. The study uses the descriptive-correlational research method. There were 224 MSMEs involved in the study. These were selected from the different municipalities where MSMEs are prevalent. The survey questionnaire was utilized to record the interview from the respondents. It was found out that the financial performance of the MSMEs is poor. with an overall score of 55. They are wanting in managing their receivables. they also have very low rate of return; they also have low survival rate because of their low rating on stability. In the context of marketing strategies, it was found out that MSMEs have very low rate of adoption of modern marketing strategies. They still employ the traditional way of enticing their customers. Lastly, it is found out that modern marketing strategies have significant and direct relationship with the MSMEs financial performance.

Optimal land use allocation for the Heathrow opportunity area using multi-objective linear programming

The London Plan, the Greater London Authority’s spatial development strategy for London, has defined Heathrow as an Opportunity Area – an area with the capacity to support additional homes and jobs – since 2004, but progress on developing the area has been minimal. Uncertainty around the expansion of Heathrow Airport appears to have adversely affected progress. Nevertheless, the most recent London Plan stipulates that the Heathrow Opportunity Area should accommodate 13,000 new homes and 11,000 new jobs. In this article, multi-objective linear programming is used to investigate whether these figures are achievable given constraints on land availability and land use mix. How land uses might best be assigned to maximise home, job and gross value added (GVA) creation within the Heathrow Opportunity Area is also explored. The main contributions are to provide independent scrutiny of London’s development strategy and to present a mathematical framework for land use allocation planning decisions in urban areas. Findings show that given 700 ha of available land, as indicated in the London Plan, home and job creation figures can be met. However, there is insufficient brownfield land to meet these targets, and development on Green Belt land would very likely be necessary. Strong land use allocations for the area are found to more heavily feature financial and professional services, other office-based businesses, and shops. Rather than presenting a single land use “solution”, results are presented using a wide range of visualisations to illustrate key trade-offs between different goals, with the secondary aim of promoting multi-objective linear programming to planners as a valuable tool to support spatial decisions and policy making.

An Economic Analysis on Turmeric Cultivation in Coimbatore District of Tamilnadu

India is agrarian society where sole dependence has been on agriculture since time immemorial trading of agricultural produce began in exchange of money. Agriculture is the primary source of livelihood for about 58 percent of India’s population. Gross Value Added (GVA) by agriculture forestry and fishing was estimated at Rs.19.48lakh Crore (Us$276.37 Billion) in 7y 20(PE). Growth in GVA in agriculture and allied sectors stood at 4 percent in 7Y 20. In 2020-21 Government of India is targeting total food grain production of 298 MT. Indian turmeric is the best in the world due to the presence of Cur cumin content. This study was conducted to assess the cost and profitability of cultivation of turmeric in the Coimbatore district. The data required for this study were collected from primary as well as secondary sources. Tools such as index number, mean, range, standarddeviation and coefficient of variance are used for the present study. Both the Total Variable Cost and Total Fixed Cost were high for large farmers in the Coimbatore district, i.e., 40.17 percent and 13.44 percent respectively. It is concluded that turmeric cultivation is profitable with a Total Cost of production for an acre of Rs. 108794 and gross income from turmeric cultivation were Rs. 214821. The Net Income was Rs. 106027 per acre. The Cost-Benefit Ratio was greater than one. It indicates that the production of turmeric was highly remunerative and profitable for the growers.

Designing a Framework for Employment-Growth Targeting in Nigeria

Unemployment in Nigeria has assumed disturbing proportions despite fifteen years of sustained economic growth outcomes between 2000 and 2014. This needs very urgent attention from policy makers since the problem has further resulted in other social vices like: armed robbery, kidnapping, political thuggery, pipe-line vandalisation, and social unrest.Unfortunately, policy makers have approached the deep-rooted problems with only tactical and superficial methods. There has been no serious attempt to target employment based on the economic fundamentals; and, the interdependencies and the interconnectedness of the various sectors and the working of the economy.Using Johansen co-integration, and applying Vector Error Correction Model (VECM) regression to time series sectoral economic data of Gross Value Added (GVA), employment, interest rate, wage rate, and inflation rate, collected from the National Bureau of Statistics (NBS) this study constructed a framework that policy makers can use to target growth and employment simultaneously.

Designing a Framework for Employment-Growth Targeting in Nigeria

Unemployment in Nigeria has assumed disturbing proportions despite fifteen years of sustained economic growth outcomes between 2000 and 2014. This needs very urgent attention from policy makers since the problem has further resulted in other social vices like: armed robbery, kidnapping, political thuggery, pipe-line vandalisation, and social unrest.Unfortunately, policy makers have approached the deep-rooted problems with only tactical and superficial methods. There has been no serious attempt to target employment based on the economic fundamentals; and, the interdependencies and the interconnectedness of the various sectors and the working of the economy.Using Johansen co-integration, and applying Vector Error Correction Model (VECM) regression to time series sectoral economic data of Gross Value Added (GVA), employment, interest rate, wage rate, and inflation rate, collected from the National Bureau of Statistics (NBS) this study constructed a framework that policy makers can use to target growth and employment simultaneously.

Analysis of the Dynamics of Structural Processes in the Context of Ensuring Sustainable Development

The tendencies and the extent of structural changes in the economy of the regions of Ukraine in the context of ensuring its sustainable development are examined in the context of the types of economic activity in terms of gross value added (GVA) during 2011-2018. In particular, the rate of change in the share of the structural mass of the economy of the regions that occurred during this period is estimated; the dynamic processes that took place in the structure of the economy of Ukrainian regions are analyzed. The analysis of the mass of structural changes shows their insignificant scale and reduction of the share in the structure of gross value added of such types of economic activity as industry, construction and finance. The estimation of intensity of structural changes by an indicator of average rates of their change shows low and rather differentiated level of intensity of structural changes in the context of types of economic activity. During the analyzed period, the annual average rate of structural changes in Ukraine was 0.131. Based on the calculation of the rate of structural changes, it is proved that structural changes in the economy of Ukraine are quite slow and are characterized by significant interregional differentiation, and the lack of positive dynamics in increasing the speed of structural changes in education is the main obstacle to creating an innovation-oriented model of economic development and reorientation of the structure of the regional economy to the requirements of the post-industrial type to the established concepts and dominants of sustainable development in accordance with EU standards.

Coal cluster as a structural factor in the development of Kuzbass

The article contains the results of the analysis of dynamics and structural transformations of employment and production of gross value added (GVA), carried out by the authors on the material of Kuzbass. The study was carried out using the shift-share analysis for 2007–2018. We can state that the employment dynamics, which was negative during this period, was determined primarily by regional factors. The dynamics of GVA was influenced by national (positive) and regional (negative) factors. The contribution of structural shifts to the growth of GVA over the past decade was negative and insignificant, and the decline in the number of employed occurred with a scarcely changed employment pattern. The coal cluster remains the core of the Kuzbass economy and retains the status of its most efficient sector – there are no obvious candidates for the role of a new leader. Meanwhile, the high dependence of the coal industry on external macroeconomic conditions, fluctuations in world markets, makes the strategic outlook of the entire region's economy vulnerable and unstable. Therefore, it is important to find and implement such model of the socio-economic transformation of Kuzbass, which will help protect and ensure the stability of the region for decades to come.

Output volatility and efficiency gains: evidence from Latin American gross value added

ABSTRACT Based on gross value added (GVA) shares of economic activities from 1990 to 2014, the paper shows that convex growth-instability frontiers exist for 19 Latin American countries. Numerical simulations show that in 2011, Latin America's industry portfolios were below Markowitz's efficiency frontier, and that rearranging the shares of economic activities contributes to efficiency gains that are negatively linked to industrial diversification. Reducing output volatility, MERCOSUR countries with a low degree of industrial diversification would average relatively high efficiency gains, while the reverse is true for CACAM and CAN countries. Analyzing more recent industry portfolios, Latin American countries closed the efficiency frontier gap and captured efficiency gains in terms of lower output volatility and higher GVA growth rates. Convex growth-instability frontiers are confirmed by stochastic frontier analysis, which identifies variations in employment ratios and industrial diversification as the key sources of inefficiency.

Spatial-territorial factors of economic growth in the Russian Federation

Relevance. In contemporary economic research, the study of the diversity of factors of national economic growth is gaining more and more significance, particularly with regard to the so-called 'spatial-territorial factors'. In contrast to the existing concepts of regional and spatial economy, the approach described in this paper is based on the hypothesis that it is possible to accelerate national economic growth. It can be done by stimulating extended economic reproduction on the subnational level, that is, on the level of relatively independent and self-contained spatial and administrative units such as regions of the Russian Federation, municipalities, agglomerations, etc. Research objective. The study aims to propose a decomposition of the economic growth rates in Russia by territorial units and to describe the spatial-territorial factors of national economic growth. Data and methods. To characterize the spatial-territorial factors, we used indices of the physical volume of gross regional product (GRP) and gross value added (GVA) in types of economic activities in Russian regions in percentage to the previous year for the period of 2013-2018. The types of economic activities were specified according to the Russian Classifier of Economic Activities of 2007 (OKVED) (Statistical Classification of Economic Activities in the European Community - NACE Rev. 1.1 (2013-2016)) and OKVED-2 (NACE Rev.2 (2017-2018)). Results. We estimated the contributions of Russian regions to national economic growth by analyzing the data on the key types of economic activities in a 6-year period (2013-2018). We also identified the regions which accounted for the largest losses in economic growth, on the one hand, and those which, on the other hand, acted as drivers of the country's economic development. Conclusion. There is a small number of regions lagging in terms of GRP and their influence on the national rates of economic growth is also insignificant. The general rates of GRP decline in a region are determined, first and foremost, by the sluggish growth in those types of economic activities that have the largest share in GRP. The number and share of the regions which demonstrate extended economic reproduction, that is, deliver at least 2% growth a year, are also quite small. These regions make up slightly more than 19% of the country's GRP. The largest group of regions comprises those regions that do not go beyond the simple reproduction (their growth rates are less than 2% a year), while their share in the country's GRP exceeds 74%. The so-called ‘heavyweights’ - regions accounting for the largest share in the country's total GRP - have the strongest effect on the national rates of economic growth, hindering it. It is the economic structure of these regions that has the biggest influence on the country's performance in such types of economic activities as wholesale and retail trade and maintenance and repair of motor vehicles. Sadly, it is in these sectors that the 'heavyweights' demonstrate the largest losses in GVA. As a result, these sectors suffer the most, which is bound to be reflected in the country's overall economic growth.

An Investigation into the Financial Performance of Micro, Small and Medium Enterprises (MSMEs) in Nanded, Maharashtra

Micro, small and medium enterprises (MSMEs) are an indispensable part of the Indian economy. In terms of Gross Value Added (GVA) and Gross Domestic Product (GDP), MSMEs accounted for about 33% and 31% of India's GVA and GDP, respectively, in the year 2019-20. Unlike large enterprises that are concentrated in the metros, MSMEs are spread across smaller and larger rural as well as urban centres of India. They are also the biggest source of employment, especially in rural India, and contribute to the rural development and industrialisation. MSMEs also act as a great social bridge as smaller enterprises are owned by socially backward classes and women than are larger enterprises. For these reasons and more, the India government has always promoted the growth and development of MSMEs through policy initiatives, technology up gradation, and via other means. Consequently, MSMEs have also grown in multi-folds in the past decades in terms of the number of enterprises in operation and the collective revenue of the sector. Several challenges affect the growth of MSMEs, however. One of these is the limited academic studies into the financial performance of MSMEs, probably due to the unavailability of adequate data. The present research attempts to fill this gap by conducting a financial performance evaluation of 51 sample MSMEs based in the district of Nanded, Maharashtra. The research utilizes Data Envelopment Analysis (DEA) to compare the financial performance of sample MSMEs selectively using the suitable variables identified by Arasu et al. (2021). Findings suggest sharp differences in the financial performance of sample units. Inefficient units are suggested to improve their return on asset, return on capital employed, and net profit margin.

Projectification in the South African mining industry

SYNOPSIS Projects or project-orientated approaches have become a common form of work in nearly all sectors of economies. This has led to concepts such as 'projectified' and 'project orientated' organizations. By defining projectification of a company, industry, or economy as the share of project work in total work, one can reasonably determine the impact that project management, and by default projectification, has had on that company, industry, or economy in terms of staff optimization and allocation. This paper presents the results for such a projectification study of the South African mining industry. This sector has long been a significant contributor to the country's economy from a gross value added (GVA) and employment point of view. Understanding the impact of projectification and the project management way of work on this industry may potentially add significant value to both the mining and project management knowledge areas. We show that although the mining industry is considered by some to operate in archaic ways, the level of projectification has increased over time, and now represents approximately one third of all work conducted. Keywords: rojectification, mining projects, project management, project management office.

Tourism contribution to Gross Domestic Product (GDP) and Gross Value Added (GVA)

The overall evolution of the economy is usually appreciated by two macroeconomic indicators GDP and GVA, which by their value gives us clear information on the state of the economy. Gross domestic product (GDP), the main macroeconomic aggregate of national accounts, is the final result of the production activity of resident producer units and which corresponds to the value of goods and services produced by these units for final consumption. Gross Value Added (GVA) is the balance of the production account and is measured as the difference between the value of the goods and services produced (valued at basic prices) and the intermediate consumption (valued at the buyer's prices), thus representing the new value created in the production process. GVA is calculated before calculating the consumption of fixed capital. Since 1990, we have been confronted with a major restructuring of the way GDP and GVA are created due to the intensive process of restructuring the economy. In the paper we will analyze the basis of the processing of national statistical data, how the tourism component of the tertiary sector contributes to the formation of the aggregate indicators presented above. In 2016, Romania had a GDP of 169.6 billion euros, below the Czech level (174.4 billion euros), Greece (175.9 billion euros) and Portugal (184.9 billion euros). Data series published by the European Statistical Office show that in the first quarter of this year, Romania's GDP adjusted for seasonal influences was 44.2 billion euros, while the value of GDP- Greece was 43.96 billion euros, the Czech Republic's 44.85 billion euros, and Portugal's 47.37 billion euros. In terms of GVA training, Romania is included in the European Union's Statistical Yearbook 201 6 as the country with the largest contributions to the Gross Value Added in the economy from industry, agriculture and construction, simultaneously with the lowest Public sector contribution (administration, defense, education, health and social welfare, etc.) Although professional, scientific and technical activities have seen the largest increase in the share of Gross Value Added training, they remain below the average of 10.4% Registered on the whole EU. There is an increase in the art, entertainment, recreation and other activities related to tourism - which brought us near the European customs and contributed to the "structural convection" of the Romanian economy. Touristic activity, particularly complex, with upstream and downstream implications, generates a tourism industry, whose components contribute to the formation of GDP and national Gross Value Added We will analyze the share of tourism in Romania's Gross Domestic Product in the period 2008-2014, gross value added in the tourism industry direct gross value added from tourism and gross domestic product of tourism in 2013 and 2014.
 
 Keywords: macroeconomic indicators, tourism industry, Gross Domestic Product, Gross Value Added economy

The Indian Bidi Industry: Trends in Employment and Wage Differentials.

Background: The bidi industry in India is predominantly an unorganized sector. It continues to enjoy tax benefits, arguably, to protect bidi workers' interests and employment. Our objective was to study trends in employment and wage differentials in the bidi industry using nationally representative data.Methods: We studied trends in employment and wages in the bidi industry using secondary data from the National Sample Survey Office (NSSO) and the Central Statistics Office (CSO), Government of India–the Annual Survey of Industries (ASI) (2000–2001 to 2011–2012) and Enterprises Survey (2000–2001, 2005–2006, 2010–2011).Results: The bidi industry contributed to only 0.65% of the total gross value added (GVA) by the entire manufacturing industry. Employment in this industry was primarily through contractors. Bidi workers earned only 17% of wages compared to workers in other manufacturing industries. Although females constituted the majority of bidi workers, they earned INR 7,000 to 8,000 (USD 155.7 to 178) less than male bidi workers annually. Despite the increase in bidi industry profits from INR 1.7 billion (USD 37.8 million) in 2005–2006 to INR 12.8 billion (USD 285 million) in 2010–2011, the wages of bidi workers have continued to decline over this period.Conclusion: Bidi workers earn much less compared to workers in other manufacturing industries and are subject to income inequality. There is a need to increase registration of the bidi industry for better administration of taxes and prevention of exploitation of the bidi workers. Skill building and alternative employment could provide better job quality, wages, social security and employment benefits.

Who turns the global thermostat and by how much?

Abstract Increasing attention is being given to the option of engineering the climate via Solar Radiation Management (SRM) as a potential component in future climate policies. We set up a quantitative model to analyze efficient levels of SRM deployment against the climatic and economic background conditions projected by the various Shared Socioeconomic Pathways (SSPs) baseline scenarios for the year 2050. The model combines three features of the data: i) SRM deployment is regionally uneven in the way it affects grid-cell temperature and precipitation, ii) temperature and precipitation affect Gross Value Added (GVA) at the grid-cell level and the effect for both takes the form of an inverted U-shape relationship, implying that optimal temperature and precipitation levels with respect to output do exist, and iii) different assumptions about economic growth and its distribution over regions, as projected by the SSPs, increase the relative share of global GVA for currently rather poor countries with high average temperatures. We find that in global terms, economically efficient levels of SRM are affected more by region-specific economic growth projections than by regional climate-change impacts. Globally, the economically efficient SRM level is proportional to the (global) GVA-weighted mean temperature increase, which varies considerably according to the various growth projections (for equal climatic background conditions). Achieving the optimal temperature in each scenario is constrained by the influence of SRM on precipitation.

Socially Equitable Energy System Transitions

Summary The European transition to a net-zero economy by 2050 implies a wide range of changes that may adversely affect certain industrial sectors, communities, and regions. However, these impacts are entirely obscured by conventional least-cost analyses. Thus, this work compares the socio-economic impacts of various strategies to decarbonize the energy system by 2050 within the framework of the Sustainable Development Goals (SDGs). We demonstrate that transitions that protect domestic strategic assets and preserve key industrial sectors correspondingly deliver a socially equitable transition. Adopting a technology-agnostic approach to decarbonizing the European electricity system maximizes the associated co-benefits and potentially increases the gross value added (GVA) to the economy by 50% relative to a business as usual scenario. This new way of thinking about the economic transition fundamentally reframes the discussion from one of cost to one of opportunity.

The Spatial Externalities of Tourism Activities in Poverty Reduction

Poverty is one of the main indicators of economic development worldwide, in such a way that one of the Sustainable Development Goals is to eradicate poverty in all its forms worldwide. The objective of this research was to examine the effect of the gross value added (GVA) of tourism on poverty in the 198 contiguous Ecuadorian cantons. The methodology used was the application of a set of spatial econometric models to capture the regional effect of tourism on poverty. Data were obtained from the Central Bank of Ecuador and the National Survey of Employment, Unemployment and Under-Employment of the National Institute of Statistics and Census (INEC). The results show that tourism activities and regional poverty are negatively related; thus, a 1% increase in tourism-related economic activity decreases the regional poverty of the canton itself by 4.31%, and that of neighboring cantons by between 0.7% and 2.4%. The inclusion of the control variables shows that schooling and the mestizo population contribute to reducing the canton’s poverty, since the regions with a high GVA of tourism have high levels of schooling and a mestizo population. Thus, regional poverty increases when the level of schooling increases in neighboring cantons. On the other hand, in cantons with a high Mestizo population, compared to the African-American population, the poverty of the canton and its neighboring regions decreases. Public policy measures which aim at reducing poverty must take into account spatial spills from tourist activity in the cantons.

The Interaction Effect of Geographical Indications and Food Inventions on Regional Productivity

In the food sector, Geographical Indications (GIs) as well as technological advancements play a crucial role on productivity and are of high economic importance for many European regions. How does the number of GI products and food patents affect labour productivity in European regions? Studying this, labour productivity was represented by the Gross Value Added (GVA) per employee of the manufacturing and agricultural sector, the two sectors expected to be mostly affected by the impact of GI products and food patents. A dataset was organised including data related to GIs and food patents of 255 European NUTS2 regions over the time period from 2000 to 2011. The data regarding GIs and food patents was collected from the DOOR and the OECD RegPat database respectively. Results show a positive and significant impact of both, GIs and food patents, on the regional manufacturing GVA per employee, but a negative combined effect of these two elements. Similar results, but less significative, are shown on the agricultural labour productivity. The implications of these findings in terms of policy design are then discussed extensively.

A stochastic semi‐non‐parametric analysis of regional efficiency in the European Union

AbstractThis paper uses a novel semi‐non‐parametric approach, the so‐called stochastic non‐parametric envelopment on Z‐variables data (StoNEZD), to measure the performance of 279 European regions (in 28 EU member states and Norway) in the years 2000, 2007, and 2014. The StoNEZD approach combines the main virtues of the parametric and non‐parametric methods in a unifying framework. The proposed model accounts explicitly for the presence of contextual/exogenous factors that might affect the regional performance and allows for the use of statistical inference methods to explore the effects of such variables (agriculture‐to‐ gross value added (GVA) share, employment rate, and euro area membership). According to our results, a larger agriculture‐to‐GVA ratio has a negative impact on regional growth rates, whereas a higher employment rate has a positive influence on regional economic levels. In overall terms, the euro area membership appears to reduce regional average growth rates but seems to enhance regional average efficiency scores.

Employment and Gross Value Added in Agriculture Versus Other Sectors of the European Union Economy

The aim of the paper is to recognize the level of employment and gross value added (GVA) in agriculture in relation to the other sectors of the European Union economy. The following research tasks were formulated: analysis of employment levels and GVA in the sectors of economy in 2000 and 2018 as well as the relationship between employment and GVA, assessment of GVA per 1 person employed in the investigated sectors and its changes in the analysed years, and assessment of the scale of surplus employment in agriculture assuming that GVA per 1 person employed in this sector would be equal to the average level reached in the industry and the services sectors. Comparative analysis and the deduction method were used in the study. Correlation coefficients between the level of employment in individual sectors and GVA per 1 person employed in the time series covering the years 2000–2008 were also calculated. A new measure of the “goal” of employment reduction in agriculture has been proposed, related to the measurement of the distance between agriculture and other sectors in terms of GVA generated per 1 employed—the Excess Employment Rate In The Agricultural Sector (EERAS). The research was based on EUROSTAT data from the years of 2000 and 2018. The process of changes in the sectoral structure of employment will probably be determined by the growth rate of demand for services, structural adjustment referring to matching the characteristics of the agricultural population to the demand for labour force in the services sector and the pace of structural transformations in rural areas. Rationalisation of employment levels in agriculture promotes improvement of its economic and social sustainability. Instruments based on financial transfers from nonagricultural sectors to agriculture should play a secondary role, since they are a burden to more efficient sectors, and in the long term, they may hinder reduction of employment in agriculture. However, due to the inevitable differences in productivity observed between agriculture and the nonagricultural sectors, at a technologically, economically, ecologically and socially justified level of employment in agriculture, transfers of the surplus generated in the secondary and tertiary sectors need at least to reduce, if not eliminate, economic consequences of these differences.

The regional economic impacts of offshore wind energy developments in Scotland

Abstract The Scottish electricity network is currently in a transition towards becoming 100% renewable. Offshore wind, due to a large natural resource, is expected to be key in this transition. In addition to the anticipated environmental benefits, increasing the share of offshore wind is expected to bring economic benefits to the region. In this study two multi-sectoral modelling methodologies – Input-Output (IO) and Computable General Equilibrium (CGE) – are used to measure the potential economic impacts on Scotland arising from both the construction and operation of the planned increase offshore wind capacity between 2018 and 2025, with comparisons made between models and development stages. With the focus on the benefits to the Scottish economy it is important to focus only on expenditures within Scotland. Found using both IO and (forward-looking and myopic) CGE modelling techniques, is increasing offshore wind capacity raises both employment and Gross Value Added (GVA) with the magnitude and timing of this change critically depend on model type and closure. This is the first – to the author’s knowledge – of a Scottish specific modelling which helps policy makers understand those elements which could affect the possible economic success of current policy towards offshore wind.