Page | 1 Analysis of Infrastructural Economic Planning For the Special Economic Zone Master of technology- Thesis- School of Infrastructure Design and Management ANALYSIS OF INFRASTRUCTURAL ECONOMIC PLANNING FOR SPECIAL ECONOMIC ZONES M.Tech Project-II Report submitted to Indian Institute of Technology, Kharagpur In partial fulfillment for the award of the degree of Master of Technology in Infrastructure Design and Management by Nishanth Vadduri (09ID6016) under the guidance of Prof. Dr. Uttam Kumar Banerjee Prof.Dr. Joy Sen SCHOOL OF INFRASTRUCTURE DESIGN AND MANAGEMENT INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR
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P a g e | 1
Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
ANALYSIS OF INFRASTRUCTURAL ECONOMIC
PLANNING FOR SPECIAL ECONOMIC ZONES
M.Tech Project-II Report submitted to
Indian Institute of Technology, Kharagpur
In partial fulfillment for the award of the degree
of
Master of Technology in Infrastructure Design and Management
by
Nishanth Vadduri
(09ID6016)
under the guidance of
Prof. Dr. Uttam Kumar Banerjee
Prof.Dr. Joy Sen
SCHOOL OF INFRASTRUCTURE DESIGN AND MANAGEMENT
INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
MAY 2011
DECLARATION BY STUDENT
I certify that
a. the work contained in this report has been done by me under the guidance of my
supervisor(s).
b. the work has not been submitted to any other Institute for any degree or diploma.
c. I have conformed to the norms and guidelines given in the Ethical Code of
Conduct of the Institute.
d. whenever I have used materials (data, theoretical analysis, figures, and text) from
other sources, I have given due credit to them by citing them in the text of the
thesis and giving their details in the references. Further, I have taken permission
from the copyright owners of the sources, whenever necessary.
Date : Signature of the Student
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
CERTIFICATE BY SPERVISOR(S)
This is to certify that the project report entitled Analysis of Infrastructural
Economic planning for Special Economic Zones, submitted by Nishanth Vadduri
to Indian Institute of Technology, Kharagpur, is a record of bona fide project work
carried out by him under my (our) supervision.
__________________________ ______________________
Superviser Superviser
Date:
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
ACKNOWLEDGEMENT
I express my deep gratitude to my project guide Prof. Uttam K Banerjee and Prof. Joy
Sen for their valuable guidance and Prof. K. S. Reddy for his constant support without
which this project would not have proceeded.
I would also like to thank Prof. Bhargab Maitra, Prof. M. Tiwari, Prof. B. Mohanty, Prof.
R. P. Pradhan, Prof. Sudeshna Mitra, Prof. S Mukhpoadadhyay and Prof. Sudeshna Mitra
for patiently listening to all my reviews and giving positive criticism and constructive
suggestions.
I would like to acknowledge the help extended to me by Shri A. S. P. Sarma, Secretary
(I/c) of VSEZ Authority Court Matters, Publicity matters Central Component of ASID;
I thankfully acknowledge the help of my friends Sri Harini Reddy, Anand ( Bawa ),
Samadhan K B, Sandhya Chowdary Potluri , Ashish J Kothari, Minu, Kuna Kranthi Anil
Rao M, Sunil kasina and Krishna P towards the data collection process and for giving me
continuous support.
Above all, I would like to thank my parents, brother, sister in law and finally my dear
Manasa Murty Ledala for giving moral support throughout my project and my life.
Date : Signature of the Student
(Nishanth Vadduri)
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
LIST OF SYMBOLS (OPTIONAL)
List of figures : Fig 1: Aerial view of VSEZ -Duvvada
Fig 2: Free trade warehouse zone
Fig 3: Standard Design Factory
Fig 4: Aerial View of the VSEZ with Road connectivity
Fig 5: Riverside view from falta SEZ
Fig 6: Standard design factory, Falta Sez
Fig 7: Aerial view of the proposed site including the Ragiv Gandhi Airport, Hyderabad
List of Tables :
Tab 01 : Distribution of land use:-
Tab 02 : Work Force and Proposed Land use structure of Urban Centres in Plain areas
Tab 03 : Percentage of developed area
Tab 04 : Size of town
Tab 05 : Water requirements for institutional buildings
Tab 06 : Socio-Cultural facilities:
Tab 07 :Fire
Tab 08 : Commercial Activity:
Tab 09 : Commercial Activity:
Tab 10 : Norms for informal activities
Tab 11 : Recreational Facilities
Tab 12 : Socio- cultural facilities
Tab 13: Parking
Tab 14: Break up area for Frieght Movements:
Tab 15: Data of the Exports of the various Industries (2005-2010)
Tab 16: Results of Regional Shift Tab 17: Excel Sheet explains the procedure for calculating the Equation for IT&ITES Tab 18: Excel Sheet explains the procedure for calculating the Equation for
Pharmaceuticals
Tab 19: Excel Sheet explains the procedure for calculating the Equation for Textile
Industries
Tab 20: Regression equations for selected sectors
Tab 21: Optimized area and employment details of each Sector
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
CONTENTS
Title Page i
Declaration by the Student ii
Certificate by the Supervisor iii
Acknowledgement iv
List of Tables v
List of Figures
Abstract vi
Contents
Chapter 1: Introduction
1.1 Preamble
1.2 Need for the project
1.3 Aim
1.4 Objectives
1.5 Scope and Limitation
1.6 Study approach
1.7 Work methodology
Chapter 2: Literature Review
2.1 Background of India and Andhra Pradesh
2.2 Concept of Special Economic Zone
2.3 Procedure for Setting up the SEZ in India
2.4 Shift and Share Analysis
2.5 Regression Analysis
2.6 Linear Programming Models
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
Chapter 3: Case studies & UDPFI Guidelines
3.1 UDPFI guideline for all Infrastructural facilities
3.2 Design concepts of Special Economic Zone
3.3 Case studies of VSEZ and FALTA SEZ
Chapter 4: Data Framework and Data Analysis
4.1 Data collection
4.2 Tools and techniques for analytical study
4.3 Shift and Share technique of Analysis
4.4 Linear Programming model for Optimum Area calculation
Chapter 5: Proposal and Recommendation
5.1 Proposed Site Location for Hyderabad Special Economic Zone
5.2 Concept of design types of Special Economic Zone
5.3 Selections of Design and Factors involving in the Internal design.
5.4 Calculation of all the Infrastructural facilities by UDPFI guidelines
5.5 A broad outline or layout of the proposed Master plan of Hyderabad SEZ
5.6 Recommendation
…
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
ABSTRACT
In the past years, India has achieved phenomenal economic growth, an
unprecedented development ―miracle‖ in human history. How did India achieve this rapid
growth? What have been its key drivers? Special Economic Zone (SEZ) model is a
commonly used key driver in developing countries to generate economic growth, to
attract foreign direct investment, to increase employment and to improve living
conditions, and thereby secures coordination between economic and urban development
policies aimed at promoting evenness of regional development. With a large number of
special economic zones (SEZ) set to come up within the next few years across the
country, the urban development ministry has expressed concerns regarding urban
planning nightmares that may arise in the form of unplanned new townships on the
periphery of these SEZs. “Infrastructure is the main determinant of SEZ success.”
Hyderabad is uniquely conceived as a fully integrated, functionally viable, and
modern business location. It is also one of the most rapidly growing cities and is currently
the fifth largest city in India. The IT hub in Southern Indian state of Andhra Pradesh is
easily accessible. Regular flights, frequent trains and the excellent road network make
Hyderabad a great travel destination. Hyderabad ranks highest on all the parameters that
are principal factors for an offshore operation, What's more, 23% of India's software
professionals, 14.75 % of India‘s textile work force,18 % in Gems and Jeweler industries
and many more work force are originate from the State of Andhra Pradesh. These stats
easily convey us that Multi Product Special Economic Zone in Hyderabad can achieve
zenith position in all parameters and for the betterment of Andhra Pradesh and India.
This study briefly summarizes the complete infrastructure and economic based
planning for the Special Economic Zone in Hyderabad, a multi product SEZ (HSEZ),
which along with its economic infrastructure can be utilized to develop the region and to
achieve a more balanced urbanization in Andhra Pradesh, unlike other multi product
SEZs in India. This is achieved based on 5 steps. (i) Extensive reviews of the existing
literature on SEZs, (ii) Shift and share analysis using exports, investments and
employments of the industrial sectors (which helps in identifying major sectors having
proper scope in all parameters especially employment), (iii) Case studies- Visakhapatnam
SEZ (issues related to infrastructure such as transportation infrastructure and social
infrastructure), (iv) Validation of the industries selected (optimum area calculation) and
(v) Preparation of master plan for HSEZ- Multi product SEZ. No financial matters are
dealt.
Keywords : Special Economy Zone, Shift and Share Analysis, Planning for Special
Economic Zone.
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
Chapter 1 INTRODUCTION
1.1 Preamble
Area in and around Rajiv Gandhi International Airport, Hyderabad is very attract for the
Foreign Direct Investment and is in huge demand for the Manufacture industries like
textile , aviations industries, electronic equipments, pharma, IT& ITES, etc. Since the
availability of resources like all Infrastructural facilities, various education institutions,
and human power. So adding the Special economic zone will surely ensure the
development of Hyderabad and in turns Andhra Pradesh in terms of Employment since
the main single point agenda of SEZ is the to increase the employment. It has been
proved that Andhra Pradesh being the most successful state in the development of SEZ
and has topped in the number of SEZ list and also the revenue share 5 years.
1.2 Need for the project
Any state or any metro city or any developing city needs to have a Special
economic zone build. This encourages the employment, because in upcoming years due
to the increase of the population employment can be affective. The Special Economic
Zone available are not giving full profit has expected with a few certain target. Since
there is a failure in the planning of SEZ in an Economic based. Any industry coming
doesn‘t make sense in achieving the expected targets. State Andhra Pradesh is the top
states having many SEZ‘s as per the Commerce of India, but only few are generating
revenue and employment like DLF Gachibowli, and VSEZ, etc. As per the discussion
with A S P Sarma the Publicity secretary of VSEZ, says that an Economic based Special
economic zone will fetch the development in all the aspect like revenue, employment,
R& D research, new technology, trading in and out, market improvement, etc. 3 National
Highways passing through the entire state (NH-7,9 and 202), Historically recognized, has
many famous universities like Osmania University, JNTU and Andhra University which
are providing many man power resource, water supply with 2 major river ( Godavari and
Krishna), etc. So finally a planned Economic based Special economic zone helps in
various way and make an value added asset to the developed of Hyderabad in term of
FDI, employment etc.
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
1.3 Aim
The project aims at ―designing a project which helps in the promoting the good rate of
exports and generating the employment in the Andhra Pradesh, India‖. The single point
agenda mentioned above can be achieved through following goals.
Goals 1 - Preparation of a complete master plan of Hyderabad special economic zone.
1.4 Objectives
The following objectives are derived from the above stated goals,
a) To identify the term of requirements in HSEZ for the proper infrastructural facilities.
b) To analyze the leading and lagging industries in the Hyderabad, Andhra Pradesh.
c) To strategically formulate the physical infrastructure facility in both the Processing
and non processing zone.
1.5 Scope and Limitations
a) Carry out all the infrastructure related issue from the existing SEZ‘s available.
b) Tracking out all the loopholes of existing available SEZ‘s and modeling it (if any).
c) Market studies and feasibility survey among the units or firms establishing in the
SEZ.
d) Carry out the relationship and market play among the other firms in the Andhra
Pradesh.
e) No financing aspects of SEZ will be involved in the project.
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
1.6: Study approach
The project goal will be achieved through the following 4 staged study approach
Literature Review
Understand the basic concepts of Special Economic Zone.
Understand terms of requirements
Identify the tools and techniques required to selection of Industrial sectors, areas of
the zone
Relevant case studies
Study the UDPFI Guidelines
Data Collection
Identification of data requirement
Primary data:
Experts opinion, Exports and Imports
Secondary data :
Maps and reports, Research papers and Employment data
Data Analysis
Identification of Infrastructure requirement from UDPFI guidelines reports and case
study
Shift and Share analysis for the data collected Exports and Imports.
Regression Analysis for each sectors selected
Linear Programming Model for Optimum area calculations
Proposal and Recommendation (outcomes)
Selection of the area or zone
Design proposal and suitable recommendation
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
1.7: Work methodology
Economic scenario in the region of
India and Andhra Pradesh Special Economic Zone in
Hyderabad
Need of the Project
Aims, goals and Objectives
Literature Review
Concept of Special Economic
Zone
Tools and Techniques
Case studies on SEZ
Data Collection
Primary Data :
Exports and Imports
Expert Opinion
Secondary data :
Map and reports,
Research papers
Employment data
Requirement of Infrastructural
aspects for the Special Economic
Zone
Data Analysis
Shift and Share Analysis for the
Manufacturing Industries in Andhra
Pradesh
Regression Analysis for the Selected Industries based on Employment data
Linear Programming method for optimum Area calculation
UDPFI Guideline
for Infrastructural
Requirements
Concept of Special Economic Zone
Design
Planning of Processing Area and
Non Processing areas
Preparation of Master Plan of
Hyderabad Special Economic Zone
Problem Identification
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
Chapter 2 : LITERATURE REVIEW
2.1: Background of SEZ in India.
Lately, India, or at least its economic growth, seems to be on everybody‘s agenda
the world over. Its economic development particularly fires the imagination of Indian and
foreign investors. This has led to books being published with titles like ―Global Power
India‖ or slogans like ―China was yesterday, India is today‖. Many institutions such as
the Indo-German Chamber of Commerce or various consulting companies in Germany
sing the Indian tune and recommend doing business in the subcontinent. What to
companies and investors may seem to be a vast new horizon for investment offering a
plethora of opportunities, is not necessarily welcomed unanimously in India. The
development of Special Economic Zones (SEZs) is one element in this vein which is
currently leading to a great deal of conflict between various actors, be they political or
societal. This is all the more interesting as India was certainly not known as a country
that inspired foreign investors.
India is one of the first countries in Asia to recognize the effectiveness of the Export
Processing Zone (EPZ) model in promoting exports. Asia‘s first EPZ was set up in
Kandla in 1965. In the year 1991, after having visited China and one of their Special
Economic Zones (SEZs), the Commerce and Industry Minister‘s reviewed to the way to
improve the climate for exports with FDI in mind – as they realized the need for a level-
playing field to be made available to the domestic enterprises and manufacturers for India
to be competitive globally – as well as enhancing the infrastructure, also in hitherto
underdeveloped regions of India. Since 2000, the government has been seriously thinking
of promoting Indian Special Economic Zones, which the aforementioned Minister, Mr.
Murasoli Maran, once described as ―our best dream projects‖ and as ―magnet and glue –
magnet to attract FDI and glue to identify and bind strategies that will benefit a large
number of people and organizations‖ Accordingly, The Government of India (GoI) first
introduced the concept of SEZ in the Export -Import Policy 2000 with a view to provide
an internationally competitive and hassle free environment for exports.
As the performance of EPZs fell far short of expectations due to various reasons, the
SEZs were conceived as a much larger and more efficient form. The policy provides for
setting up of SEZ‘s in the public, private, joint sector or by State Governments.
After the introduction of SEZ scheme in the EXIM Policy from 01.04.2000, all
existing FTZ/EPZ have been converted to SEZ.
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
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2.2: Concept of Special Economic Zone
Special Economic Zones (SEZs) were set up by the Government of India to
augment infrastructure facilities for export production. The Ministry of Commerce and
Industry launched the SEZ scheme in April 2000 to provide an internationally
competitive and hassle free environment for export. SEZs are specifically delineated duty
free enclaves and are deemed to be foreign territories for the purposes of trade
operations, duties and tariffs
Special economic Zones are considered as growth engines that can boost
manufacturing, augment exports and generate employment. Components of a Special
Economic Zone include infrastructural facilities like roads, airports, ports, transport
system, generation and distribution of power, telecom, hospitals, hotels, educational
institutions, leisure and entertainment units, residential / industrial / commercial
complexes, water supply sanitation and sewerage system and any other facility required
for development of the Zone.
Special economic Zones enjoy a number of fiscal benefits including benefits under
Income Tax, Customs, Excise, VAT, Service Tax, etc and hence are considered a very
promising business destination.
2.2.a: What is Special?
The word "Special" mainly means special economic systems and policies. In other words,
the central government gives the special economic zones special policies and flexible
measures, allowing them to utilize a special economic management system.
Special tax incentives for foreign investments in the special economic zones.
Greater independence on international trade activities.
Economic characteristics are represented as "4 primacies":
1) Constructions primarily rely on attracting and utilizing foreign capitals;
2) Primary economic forms are Sino-foreign joint ventures and partnerships as
well as wholly foreign-owned enterprises;
3) Products are primarily export-oriented;
4) Economic activities are primarily driven by market.
Special economic Zones are listed separately in the national planning (including
financial planning) and have province-level authority on economic administration.
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
2.2.b: Objectives and Salient features of Special Economic Zone
The main objectives of SEZ scheme can be briefly stated as:
1. Attract Foreign Direct Investment (FDI)
2. Earn foreign exchange and contribute to exchange rate stability
3. Boost the export sector, especially non traditional exports
4. Create employment opportunities
5. Introduce new technology
6. Develop backward regions
7. Stimulate sectors such as electronics, information technology, R & D, tourism,
infrastructure and human resource development that are regarded as strategically
important to the economy
8. Create backward & forward linkages to increase the output and raise the standard of
local enterprise that supply goods and services to the zone
2.2.c: Salient features of Special economic zones
The Salient features of Special economic zones include
1. No License required for import
2. Manufacturing, trading or services activities allowed
3. Full freedom of subcontracting
4. No routine examination of export import cargo by customs authorities
5. SEZ units to have positive net foreign exchange earner
6. Financial incentives like tax holidays, duty free imports and exports
7. Single window clearance
8. high quality infrastructure
9. Strategic location and market access
Special Economic Zones in India are governed by provisions of Special
Economic Zones Act, 2005 and Special Economic Zones Rules 2006. Up to the end of
March, 2010, 363 private SEZs notified under the SEZ Act, 2005. Currently there are 19
functional SEZs. The SEZ units provide employment to about 1.10 Lakhs persons (out of
which 40% are Females)
Exports:
Year Value (Rs. Crores) Growth Rate
(over previous year )
2004-05 18,314 32%
2005-06 22809 25%
2006-07 34,615 52%
2007-08 66,638 92%
2008-09 99,689 50%
2009-10 42501.76
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
2. 3: Procedure for Setting up the SEZ in India
With in 45 days With in 6Months
Within 60 days
SEZ can be formed in three ways
By Applying to State Govt
By applying to Board of Approval
Central Govt may suo-motto set up and notify SEZ
State Govt forward the Proposal to Board of Approval
Obtain the concurrence of State Govt
After consulting the State Government and identifying the area
Board of Approval approves the proposal
Central Government shall issue letter of Approval to developer
Developer shall furnish to Central Govt information
Central Govt will notify the area as Special Economic Zone
By Applying to State Govt
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
2.4: Concept of Shift and Share Analysis
Shift-share analysis is one way to account for the competitiveness of a region's
industries and to analyze the local economic base. This analysis is primarily used to
decompose exports or employment changes within an economy over a specific period of
time into mutually exclusive factors. It paints a picture of how well the region's current
industries are performing by systematically examining the national, local, and industrial
components of exports or employment change. A shift-share analysis will provide a
dynamic account of total regional exports or employment growth that is attributable to
growth of the national economy, a mix of faster or slower than average growing
industries, and the competitive nature of the local industries.
Like other analytical economic tools, the shift-share technique is only a
descriptive tool. Once completed, the analysis provides a representation of changes in
exports or employment growth or decline, and it is useful for targeting industries that
might offer significant future exports increase or employment opportunities. By
interpreting data provided by shift-share, we can explore the advantages your local area
may enjoy, as well as identify growth, or potential growth industries that are worthy of
further investigation.
SS = NS + IM + RS SS= shift share
NS= National Share
IM=Industrial Mix
RS= Regional Shift
The equations for each components are :
NS = S(t-1)
* ( oNt / oN
(t-1) )
IM = [S(t-1)
* ( iNt / iN
(t-1) ] – NS
RS = S(t-1)
* [ (S(t)
/ S(t-1)
- (iNt / iN
(t-1))]
What do the subscripts, superscripts and the alphabets indicates?
S(t-1)
= total exports of an industry (i) at the beginning of the analysis period (t-1).
S(t)
= total exports of an industry (i) at the end of the analysis period (t).
oN (t-1)
= total exports of the Nation at the beginning of the analysis period (t-1).
oNt = total exports of the Nation at the end of the analysis period (t).
iNt = total exports of the Nationwide in an industry, at the beginning of the analysis
period (t-1)
iN(t-1)
= total exports of the Nationwide in an industry, at the end of the analysis period (t)
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
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2.4.a: Components of Regional Industry Exports or Employment Change
As stated above, the shift-share analysis divides the change in local industry
exports into three components.
National growth share - The share of local exports growth that can be attributed
to growth of the national economy. Specifically, if the nation as a whole is
experiencing exports growth, ("a rising tide lifts all boats"), one would expect
total national growth to exert a positive growth influence on the local area. This
factor describes the change that would be expected simply by virtue of the fact
that the local area is part of a changing national economy. In the analysis, we first
examine the national growth share, or the number of exports lost or gained in a
region if total exports in the region had changed at the same rate as overall total
national exports.
Industrial mix - The share of local exports growth that can be attributed to the
region's mix of industries being analyzed. This second factor is the change in a
local industry that would be attributable to the growth or decline of the industry
nationally. This component isolates the fact that nationwide, some industries have
grown faster or slower than others. It represents the contribution that a specific
industry nationally has made to the change in the number of exports in the region.
Local share (Regional shift) - This share of local exports growth describes the
extent to which factors unique to the local area have caused growth or decline in
regional exports of an industrial group. We observe that even during periods of
general prosperity, some regions and still some industries grow faster than others
do. This is usually attributed to some local comparative advantage such as natural
resources, linked industries, or favorable local labor situations. The local
component aids in identifying a local area's economic strengths. This element of
the analysis is a representation of how a region's competitive position can
contribute to regional exports growth. Shift-share, and the local share component
in particular, can point to industries that enjoy local comparative advantage. It
cannot, however identify what the actual comparative advantage is. It is important
to identify what factors have contributed to the local area in outperforming the
nationwide growth. This wide range of factors is very diverse and often includes
elements such as:
a) Local raw materials or local inputs
b) Transportation methods
c) Local wage rates
d) Influence of local industries
e) University influences
f) Local consumption and savings
g) Other comparative advantages
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
It is also important to identify whether the large gainers or losers are basic, or
export industries of your region. These industries are important to your local economy for
job creation. In addition these industries are key to pulling in dollars from outside of the
local region and thus have a "multiplier" effect. By this we mean that these "basic"
industries will generate larger revenues in the long run because they are attracting money
from outside of your workforce area as well as creating new jobs within the region.
2.4.b:Limitations
It should be noted that shift-share is a simple analytical technique and does not
account for many factors. Most notably, it minimizes the impact of issues such as
business cycles, identification of actual comparative advantages, and differences caused
by levels of industrial detail.
A shift-share industrial analysis is a "snap-shot" of 2 particular time frames and
may not give an entirely clear picture of the local, and national economies because the
results are sensitive to the period of time chosen. Shift-share analysis does however offer
a simple, straight forward approach to separating out the national and industrial
contributions from local or regional exports or employment growth.
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Analysis of Infrastructural Economic Planning For the Special Economic Zone
Master of technology- Thesis- School of Infrastructure Design and Management
REGRESSION ANALYSIS
In statistics, regression analysis includes any techniques for modeling and
analyzing several variables, when the focus is on the relationship between adependent
variable and one or more independent variables. More specifically, regression analysis
helps one understand how the typical value of the dependent variable changes when any
one of the independent variables is varied, while the other independent variables are held
fixed. Most commonly, regression analysis estimates the conditional expectation of the
dependent variable given the independent variables — that is, the average value of the
dependent variable when the independent variables are held fixed. Less commonly, the
focus is on a quantile, or other location parameter of the conditional distribution of the
dependent variable given the independent variables. In all cases, the estimation target is a
function of the independent variables called the regression function. In regression
analysis, it is also of interest to characterize the variation of the dependent variable
around the regression function, which can be described by a probability distribution.
Regression models involve the following variables:
The unknown parameters denoted as β; this may be a scalar or a vector.
The independent variables, X.
The dependent variable, Y.
In various fields of application, different terminologies are used in place of dependent
and independent variables.
A regression model relates Y to a function of X and β.
The approximation is usually formalized as E(Y | X) = f(X, β). To carry out regression
analysis, the form of the function f must be specified. Sometimes the form of this function is
based on knowledge about the relationship between Y and X that does not rely on the data.
If no such knowledge is available, a flexible or convenient form for f is chosen.
LINEAR PROGRAMMING MODELS:
Linear programming (LP) is a mathematical method for determining a way to
achieve the best outcome (such as maximum profit or lowest cost) in a
given mathematical model for some list of requirements represented as linear
relationships. Linear programming is a specific case of mathematical programming.
More formally, linear programming is a technique for the optimization of
a linear objective function, subject to linear equality and linear inequality constraints.