ANALYSIS AND PLANNING OF REGIONAL DEVELOPMENT - CONTEXTUAL VARIABLES TO DEVELOP A MODEL FOR MONITORING FINANCIAL INDICATORS AT REGIONAL LEVEL.

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1 Annals of the Constantin Brâncuşi University of Târgu Jiu, Econoy Series, Issue 6/2013 ANALYSIS AND PLANNING OF REGIONAL DEVELOPMENT - CONTEXTUAL VARIABLES TO DEVELOP A MODEL FOR MONITORING FINANCIAL INDICATORS AT REGIONAL LEVEL. CRISTINA GRADEA, Associate Professor, Gh. Cristea University, Bucharest cristina_gradea@yahoo.co ABSTRACT Application of quantitative techniques in regional analysis can provide an understanding of both the change in tie of regional econoic perforance and the interdependencies between econoic sectors, including the use of projections to test the potential future developent of the region. Qualitative techniques allow also the explanation of the reason for regional developent patterns occurring in a region and the iproveent of analysts' ability to reflect on the results and econoic opportunities for a future based on collective experience, wisdo and judgent of the actors in region econoies. Keywords: regional developent, planning, regional analysis, regional copetitiveness, strategic infrastructure JEL classification: G3,G32 1.Regional analysis showed priary role of industrial clusters as driver of regional developent, but considering the econoy as a whole, or econoic sectors and large firs as independent of each other. In fact, any regional econoy is iersed in a aze of links, fluxes and ulti-sector factors, each econoy being specialized and playing a key role in defining future structure and shape of the econoy. Using input-output analysis helps the deduction that clusters in industry is one of the tools available to regional econoic analysis providing a better understanding of the relations or links that are the industries of the region. While inter-sector financial flows and other flows is an iportant indicator of copetitiveness, these factors do not explain coplex or profound structural eleents that contribute to generating copetitive advantage of firs, industries or industry clusters within a region. Econoic base theory shows how often there is a sall nuber of copanies or business that plays a pivotal role in defining the econoic structure, perforance and developent of the region, any of these pivotal industries ranging networks or clusters, these clusters integrating core industries network of bidders / vendors and basic econoic infrastructure, supporting regional developent and copetitiveness in copetitive arkets. To axiize the econoic developent potential of a region it is necessary, however, to know which factors in certain industries contribute to copetitive advantage, to easure their strengths and weaknesses and to identify the relationships and interdependencies between factors in supporting the developent of individual industries or industrial cluster. However, due to increased uncertainty and copetition in the business environent in the era of globalization and rapid change, it is necessary to develop ore rigorous ethods for regional risk assessent, which is specific to the region, faced with rapidly changing conditions and copetitive advantage. There were developed ore analytical techniques necessary to easure and copare the characteristics of industries and clusters and relations between these techniques which involve soe for of ulti-sector analysis (AMS), this ethod representing an eclectic instruent developed fro different quantitative and qualitative analytical techniques, using atrix analysis tool. 2. Multi-sector regional analysis: interdependencies and hierarchies To use AMS, it is necessary to establish criteria C i,and coparing such criteria for several sectors, j industries, R, for the four eleents of analysis, strengths, T, Opportunities, A, weaknesses, S, danger, P (TOSP odel) siplified this process is shown in table. 1.In atrix cells are the specific eleents of the analysis, characteristic of a specific criterion in a given branch, region, all cells are characterized by the cobination of two parts, one specific to the internal environent, the other to the external environent of the branch. 180

2 Annals of the Constantin Brâncuşi University of Târgu Jiu, Econoy Series, Issue 6/2013 C i R j Table no O,S 2 T,P 3 T,O.. S,T By coparing the results fro a particular region or an industry can be identified critical issues highlighted by the 4 eleents of the analysis affecting perforance of a region. In this way an appropriate strategy can be developed to iprove negative factors or strengthen on the positive. Matrix theory is used when a coplex set of inforation representation and to siplify notation, when dealing with a large nuber of siultaneous equations, AMS atrix using soe applications to develop a nuber of relevant indicators. Factor analysis and structural analysis can be used to identify factors contributing to copetitiveness and developent of a region, an application of which is developing indicators that allow coparisons between industries or regions according to criteria represented in the table. 2. Max Table no.2. Sectors (Si) 1 2 n a ,07 b ,27 c ,14 d , , C Index 0,20 0,48 0,44 The advantage of such a atrix is that it can be used to provide a coon basis for coparing interregional factors contributing to copetitiveness and regional developent, in order to calculate an aggregate index. AMS originated in two areas of research: theory of regional input-output atrix and structural analysis. Regional input-output odels describe the transactions between a region and the world, and of the activities within the region. These odels generate an index or a ultiplier rate which easures the total ipact effect of an increase in deand for eployent or incoe. It can also be used to predict or forecast future perforance potential ipact of a region's econoy and changes in inter-industry transactions. Structural analysis perfors the collection and processing of qualitative data set, allowing the analyst to describe a syste using atrix that interconnects all syste eleents. The ethod allows to identify and analyze relationships between key variables, ordered hierarchically, which are the investigated syste structure, ie the network of relationships between syste eleents, the structure aintaining the peranence of the syste. In practice, structural analysis is used in two ain ways: -in researching the decision-aking on key variables that relate to the structure and size of the syste; -in aking predictions. AMC leverages key eleents of analytical techniques presented suary above, the ain instruent of AMC as atrix, which easures and analyzes different variables of econoic sectors, which includes a regional econoy, represented in the table. 3. Table no.3 S C n scor criteriu ax scor sector 181

3 Annals of the Constantin Brâncuşi University of Târgu Jiu, Econoy Series, Issue 6/2013 a c d. scor sibol ax scor criteriu -where: S = regions, sectors, industries; C = evaluation criteria. Using this basic atrix structure allows the developent of tools for regional analysis by applying AMC fraework. Nuber of selected sectors depends on the degree of detail desired, it is advantageous if the nuber of sectors corresponding input-output analysis, and can be ade in this way, coparisons between input-output tables and atrix AMC. A significant ethodological proble of AMC is the weighting of factors, not all factors easured by this technique with the sae weight in all industries, in any cases there are significant differences between sectors in ters of iportance of factors. In this respect, different weights are applied in the assessent factors used, depending on the iportance and priority values attached to various factors. For exaple, you can use a scale fro 1 to 5 on iportance factors, and based on values, grades given to each factor attached an industry, by experts, deterine the average grade for different factors in each industry, and can be get the average for each factor in the industrial sector. The share is ultiplied by the initial notes to obtain the weighted grade. Multi-criteria analysis, AMC, offers policy akers an alternative when progress toward ultiple goals can not be easured by one criterion, ie onetary value and can be used as a support tool to evaluate the results of a project based on a predeterined set of criteria or variables. AMC is widely used in decision-aking processes to the environent in which a nuber of criteria, often conflicting, need to be taken into account as part of a general process of decision aking. One of the siplest fors of AMC is the atrix analysis of the objectives, AMAO, which evaluates the results of alternative projects based on different criteria, such as transport plan, involving a coplex linear prograing. X ij as being a easure of the Table no. 4. shows the basic atrix used by AMC, grade criterion-option, strength of the relationship between each choice i, and each criterion j, evaluated for all cells ij of the atrix. Notes for each Xij are aggregated on a horizontal line, scoring option note, NO: NO i1 Xij (1) The highest grade (score) expresses the best or worst option, depending on the scale of easureent. It is unusual that all criteria to have the sae weight, for exaple, life-threatening probles will probably have a higher rating in the risk analysis. ij To haronize the iportance of different criteria are applied weights to each criterion weighted scores Xij, NOP, is calculated as follows: NOP i1 j Xij (2) Table no j... Option 1... i... n X ij 182

4 Annals of the Constantin Brâncuşi University of Târgu Jiu, Econoy Series, Issue 6/2013 i1 Xij This basic technique can be used for aking decisions and assessing prospective AMC advanced applications using coplex atheatics, particularly when the criterion is considered in tiers. AMS can be used to support the following aspects of regional developent potential and perforance: -identify and assess factors that contribute to supporting the growth of regional econoic copetitiveness, and core copetencies, strategic infrastructure and risk anageent; -identify new opportunities and arkets for regional econoic developent, involving both coercial developent potential and developent industries sectors intersect. In the context of regional econoic developent core copetencies relate to the specific or unique ways of the areas to use resources, technology, skills, and infrastructure and so on, in order to achieve copetitive advantage. Essential skills assessent requires the developent of two indicators, naely: 1.indicator easuring the copetitiveness of the econoy; 2.indicator easuring core copetencies of the region. Systeatic and evolutionary research and analysis essential skills that contribute to regional econoic copetitiveness and capacity allows the deduction and establishing a easure of core copetencies, allowing the annual coparative perforance of nations and regions, in particular, of those factors that are powers applicable to the essential regional econoic developent. 3.Conclusions Strategic infrastructure plays a critical role in econoic developent and copetitiveness of regions, even inor weaknesses of that infrastructure can have a significant ipact on the copetitiveness of industries and organizations involved in the developent of the region. Through analyzing the indicator factors can be identified strategic infrastructure factors contributing to copetitiveness and copare these factors for different regions. Identifying key factors has iportant strategic infrastructure, particularly for investors seeking locations for industries that can capitalize on these advantages. To identify econoic developent opportunities within the region ultilateral sectors is necessary to use input-output tables derived fro input-output analysis to identify new opportunities for growth and investent in the region, analyzing business ties between industry, ix and agnitude relations as indicators of the extent and diversity of the regional econoy, highlighting its ability to support exports and new econoic developent activities. Operation of AMS, by deriving various indicators, involves a nuber of processes, including choice of data collection tools and protocols design, data analysis and interpretation. Data collection can be done in three ways: general surveys, expert panels, cobining the two. AMS ipleentation on a regional econoy consues tie and resources, the stages involved in aking this process as follows: identify the factors and probles of developent, developent of the questionnaire and panel type, perfor the assessent questionnaire and panel data analysis using statistical coputer progras, evaluation of external data processed, which ay lead to changing soe of the data copiled and used for AMS. Bibliography [1] Kraybill D., Kilkenny M. - Econoic Rationals For and Against Place based Policies, 2003 [2] Kuhn T.S. - The Structure of Scientific Revolutions, Chicago, Chicago University Press, 1970 [3] Kuhnen F. - The Concept of Integrated Rural Developent, Korean Journal of Econoics, 1997 [4] Popescu I., Bondrea A., Constantinescu M. - Globalization, yth and reality, Econoica House of Publishing, Bucharest, 2004 [5] Popescu M. - Globalization and trivalent developent, Colection Century 21, Ed. Expert House of Publishing, 1999 [6] Porter M.E. - Copetition in Global Industries, Boston, Mass, Harvard Business School Press, 1986 [7] Postelnicu Ghe., Postelnicu C. - Econoic Globalization I, Econoica House of Publishing, Bucharest, 2000 [8] Rayond L. - L ipact des systèes d inforation sur la perforance de l entreprise, in Faire de la recherche en systèes d inforation, Paris, Vuibert,

5 Annals of the Constantin Brâncuşi University of Târgu Jiu, Econoy Series, Issue 6/2013 [9] Rayond L. - Mondialisation, éconoie du savoir et copétitivité: un cadre de veille des tendances et enjeux stratégiques pour la PME, in Gestion, Paris, 2000 [10] Rouch Theo, ş.a. - Rural Regional developent: A Regional Response To Rural Poverty, Wiesbaden,