276 10 3494 https://omeka.ibu.edu.ba/files/original/4b20eeda644f846690cf8e25e1c71c33.pdf 38bb8606d385a25a0fcec67d58fa3766 PDF Text Text Journal of Economic and Social Studies Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation Abdelhafidh Dhrifi Faculty of Economic Sciences and Management, Department of Economics, University of Sousse-Tunisia Sousse-Tunisia Abdelhafidh.dhrifi@gmail.com Abstract: The role of agriculture in economic development remains much debated. This paper takes an empirical perspective and focuses on the relationships between agriculture productivity and poverty reduction. The contribution of agriculture sector to poverty is shown to depend on its own growth performance, its indirect impact on growth in other sectors, the extent to which poor people participate in the sector, and the size of the sector in the overall economy. Bringing together these different effects and taking into consideration the role played by technological innovation, we use an aggregate annual panel data, on a sample composed of 32SubSaharanAfrica (SSA) countries, from 1990-2011 to estimate a simultaneous equation model that capture the interrelationship between agriculture productivity, technological innovation and poverty. Findings show first that agricultural productivity contributes significantly to economic growth and poverty in SSA. Second, technological innovation appears to have a positive and significant impact on poverty Introduction through its direct and indirect impact through agriculture productivity and growth. Keywords: Agriculture Productivity, Economic Growth, Technological Innovation, Poverty, Simultaneous Equation Model, SSA. JEL Classification: N51, Q10, Q16. Article History Submitted: 11 May 2013 Resubmitted: 01 October 2013 Accepted: 22 October 2013 139 �Abdelhafidh Dhrifi Around the world, agriculture is and will continue to be a major building block in the achievement of the Millennium Development Goals (MDGs). Recent statistics show that agricultural production needs to increase by 70 percent by 2050 in order to feed the world (World Bank, 2007). However, hunger and malnutrition persist in many countries, often because of slowly agricultural productivity (AP)i. The expected increases in agricultural demand, associated with population growth hand increase per capita incomes, will require continued increase in agricultural growth. History shows that different rates of poverty reduction over the past 40 years have been closely related to differences in agricultural performance particularly the rate of growth of agricultural growth. In simple terms, this means that these are the countries that have managed to increase their agricultural productivity that have managed to reduce their poverty rates (Abare, 2001). According to that, agriculture remains the economic heart of most developing and developed countries. The productive potential of agriculture is varied and depends on the natural resource endowment, geographical location, links with the rest of the economy and social dimensions of the population. Some authors expected that, success strategies from pro-poor growth in agriculture passed through improved agricultural productivity and technological innovation (Bravo-Ortega and Lederman, 2005). These efforts should focus on the improving conditions for greater access to technological innovation because it is pointed that technological change in agriculture is essential for reducing poverty, fostering development, and stimulating economic growth especially in developing countries. Thereby, the agricultural development model, in many developing countries, is based primarily on technical aspects. The objective of this model is not only physically increase the productivity of agricultural land, but also to increase participation of small and medium farmers in the production. In this context, it tries to provide farmers' technological package "designed as the main instrument to increase agricultural production and to reduce poverty. Further, if empirical efforts showing the relationships among agricultural growth and economic growth have grown considerably over the last few years, this paper differs and focuses on agricultural sector development and poverty reduction. More specifically, the objectives of this paper are to identify the various channels through which agricultural productivity influence poverty reduction and to investigate the role played by technological innovation in determining agricultural performance. The paper utilizes aggregate annual panel data, on a sample composed of 32Sub-SaharanAfrica (SSA) countries, from 1990-2011 to estimate a simultaneous equation model that capture the interrelationship between 140 Journal of Economic and Social Studies �Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation agriculture productivity, technological innovation and poverty. In section 2, we present an overview of the literature on the relation connecting agriculture productivity and poverty. Section three discusses empirical model and describes the variables. Model appraisal and validation are handled in section four. The paper concludes in section five. Literature Review In recent years, agriculture became an important part of the livelihoods of many poor people, and it is frequently argued that agricultural productivity is a fundamental pre-requisite for poverty reduction (Byerle et al., (2005) Johnston and Mellor (1961)) account explicitly for agriculture as an active sector in the economy. In addition to labor and food supply, agriculture plays an active role in economic growth through important production and consumption linkages (DFID, 2005). On the consumption side, a higher productivity in agriculture can increase the income of the population, thereby creating demand for domestically produced industrial output. Such linkage effects can increase employment opportunities, thereby indirectly generating an increase of income. Moreover, agricultural goods can be exported to earn foreign exchange in order to import capital goods. Agriculture contributes to both income growth and poverty reduction in both developed and developing countries by generating employment and providing food at reasonable prices. It provides food, income and jobs and hence can be an engine of growth in agriculture-based countries and an effective tool to reduce poverty. It can thus facilitate development by allowing a sustained transfer of resources from agriculture to the rest of the economy, including through the supply of capital to other sectors. The most direct contribution of agricultural growth is through generating higher incomes for farmers. Two conditions affect the influence of this on poverty. First, there is the degree to which the poor are engaged in farming. The second condition is the extent to which output growth raises incomes. In particular, if land is scarce, increased returns to agriculture may be reflected in higher land rents. In cases where the poor till land belonging to others, the capitalization of benefits into higher rents could seriously undermine the contribution to poverty reduction. Economic literature offers four transmission mechanisms critically link changes in agricultural performance, more especially productivity increases, to progress in reducing poverty: the direct and relatively immediate impact of improved agricultural performance on incomes; impact of cheaper food for poor; agriculture’s contribution to growth and the generation of economic opportunity in the non-farm sector; and 141 �Abdelhafidh Dhrifi agriculture’s fundamental role in stimulating and sustaining economic transition, as countries shift away from being primarily agricultural towards a broader base of manufacturing and services (Allen, 1994). Empirical studies support the view that agricultural growth promotes poverty reduction (see the review by Thirtle et al., 2001; Hanmer and Nashchold, 2000; Irz et al, 2001; Kanwar, 2000; Matsuyama, 1992; Ravallion and Datt, 1999; Stern, 1996; Timmer, 2003; Wichmann, 1997). For example, Matsuyama (1992) shows that improving agricultural productivity has probably been the single most important factor in determining the speed and extent of poverty reduction during the past 40 years. Much of this evidence is derived from the Green Revolution in Asia. Examples from Africa are noticeably fewer. In the same context, Warr (2001) provided evidence that growth in agriculture in a number of South East Asian countries significantly reduced poverty, but this was not matched by growth in manufacturing. Gallup et al. (1997) showed that every 1% growth in per capita agricultural Gross Domestic Product (GDP) led to 1.61% growth in the incomes of the poorest 20% of the population much greater than the impact of similar increases in the manufacturing or service sectors. This result is confirmed by Stern (1996) which found a similar and significant relationship between growth in the agricultural and non-agricultural sectors during 1965–1980 for a large number of developing countries. In terms of the role of agricultural growth in reducing poverty, Thirtle et al. (2001) concluded from cross-country regression analysis that, on average, every 1% increase in labor productivity in agriculture reduced the number of people living on less than a dollar a day by between 0.6 and 1.2%. In the same vein of studies, De Janvry and Sadoulet (2000) estimate that in Asia, a 10% increase in total factor productivity in agriculture would raise the incomes of small-scale farmers by 5%. At the same, Hazell and Haddad (2001) estimated that a 1% addition to the agricultural growth rate in India stimulated a 0.5% addition to the growth rate of industrial output, and a 0.7% addition to the growth rate of national income. Numerous other studies reveal similar results, but emphasize the important qualification that the degree to which agricultural growth reduces poverty is usually conditional upon the initial distribution of assets (in particular land) and the initial level of inequality (Bourgignon and Morrison, 1998; Timmer, 2003; De Janvry and Saddoulet, 2000; Andersson-Djurfeldt, 2013). Lipton and Longhurst (1989) and Hazell and Ramasamy (1991) provide similar evidence. 142 Journal of Economic and Social Studies �Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation Finally, economic literature offers three major opportunities that can transform the agriculture of a country into a force for economic growth and thereby can reduce poverty: advances in science and technology; the creation of regional markets; and the emergence of a new crop of entrepreneurial leaders dedicated to the continent's economic improvement. The following paragraph focuses on the role of technological innovation in determining the relationships between agriculture productivity and poverty reduction. Technological Innovation and Agricultural Performance Having reviewed the role that agriculture can play in economic growth and poverty, we now look at the role that can play technological innovation in agriculture productivity and by consequence, in reducing poverty. Agricultural science, technology, and innovation are vital to promoting development and poverty reduction (Binswanger and Townsend, 2000). To this end, many studies on agricultural research, extension, and education have highlighted the importance of technological innovation and policies in these areas (De Janvry and Sadoulet, 2000). Thereby, technological innovation can benefit the poor in many different ways: First, it can help poverty alleviation directly by raising the incomes of poor farmers who adopt the resulting technological innovation. Second, technological change can help reduce poverty indirectly through the effects which adoption, by both poor and non-poor farmers, can have on the real income of others largely through lower food prices for consumers and increased employment and wage effects in agriculture and other sectors of economic activity through production, consumption, and savings linkages with agriculture. Technological innovation is considered now as an integral part of the reform package needed to stimulate agricultural growth and poverty (Lopez and Valdez, 2000). More than by just spurring economic growth, technology can do much to reduce poverty and environmental damage. It can increase the supply of food and reduce morbidity and mortality, particularly in developing country. It can also increase the supply of water and, it can lower the costs and increase the supply of energy to the poor. The reason for the choice of technologies innovations, as a determinant factor of agricultural productivity is linked to the fact that growth and performance in agriculture and food sectors is central to any strategy of reducing poverty and increasing economic growth and poverty (Datt and Ravallion, 1998). In this context, Warr (2001) used a computable general equilibrium (CGE) model, loosely styled on the case of the Philippines, to show how, in a small open economy, technical improvements in farming are likely to 143 �Abdelhafidh Dhrifi benefit labour, especially if the technical change is labour-using or landsaving. However, Hazell and Haddad, (2001) show that when output increase is due to technical innovation, benefits to the poor who farm, and for whom farming provides the majority of their income, may be limited for several reasons: adoption by the poor can be limited by a lack of access to inputs and to the knowledge necessary to use the technology. When technology and policies are biased against smallholders, agricultural growth can even have perverse effects on poverty (Datt and Ravallion, 1998). In SSA countries, national and international agricultural research investments have generated a range of improved technologies, especially of modern varieties of the major food crops. A number of Consultative Group on International Agricultural Research (CGIAR) centers, have partnered with national programs and led major technology development efforts aimed at raising the yields of major food crops or averting yield losses that threatened the livelihoods of millions of Africans (BravoOrtega and Lederman, 2005). Finally, access to technological innovation is essential if we are to make agriculture the main driver of pro-poor growth. It can make agriculture more responsive, dynamic, and competitive. Households and businesses are highly dependent on both access to technological innovation for their agricultural production and labor to produce surpluses (Wichmann, 1997). Empirical Model Descriptions Specification, Sample and Variables Model Specification and Descriptions of Variables Recall that the principal objective of this study is to estimate the role of agricultural growth in reducing poverty rates. The key feature of this study centre’s on the way in which agricultural growth affects poverty directly and indirectly via economic growth taking into account the role that can play technological innovation in this relationship, which has been largely ignored by the previous estimates. To accomplish this, we specify a simultaneous equations model that consists of a series of three equations describing the behavior of poverty and economic growth facing a change in agricultural growth in the presence of an improvement in technological innovation. In particular, the model consists of a poverty equation, growth equation and agriculture productivity equation. The first endogenous variable in the model is poverty, which is measured as the household final consumption expenditure per capita to GDP over 144 Journal of Economic and Social Studies �Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation the period 1990-2011. We introduce in the poverty equation a set of control variables that are commonly used as factoring explaining poverty. We introduce the income inequality to capture the kind of distribution of income, GDP per capita growth to capture the economic development, the number of telephone mainlines per 1000 people as indicator to measure the quality of infrastructure and population growth. The second endogenous variable in the model is agricultural. We explain this variable by a set of variables that determine agricultural growth: Agricultural irrigated land (% of total agricultural land), employees in agriculture (% of employment) and an indicator measuring the level of technological innovation measured by agricultural machinery (tractors per 100 sq km of arable land). The third endogenous variable in the model is economic growth, which is measured as the average of growth rate of real Gross Domestic Product (GDP) per capita over the same period. The growth equation specification follows the commonly accepted form in the cross-country growth literature (Barro, 1991), and includes a group of economic variables that have been identified by empirical growth literature as robust determinants of economic growth, (Levine and Renelt, 1992). In addition to technological innovation, the growth equation includes other variables. The first variable is the average years of secondary schooling in the total population to capture the level of human capital, it is expected to have a positive impact on economic growth. The equation also include rate of inflation (it is introduced in to the model to capture the impact of macroeconomic stabilization on poverty), trade openness to capture the degree of international openness on economic growth. The complete model used in this paper to estimate the impact of agricultural growth on poverty is based on the model of Alen and Coulibaly (2009) and it has the following formula: POVit   0  1it AGit   2GDPGit   3TIit   4 INQit   5 POPit   6TELit  1it 1 GDPGit   0   1 AGit   2TIit   3 INFit   4TRADEit   5 SCHit   6 FDit  2it  2 AGit   0  1it GDPGit   2TI it  3 AILit   4 EAit  3it (3) 3 Where: POV: design poverty index which is measured by the household final consumption expenditure to GDP as a proxy of poverty (Odhiambo, 2009, 2010). 145 �Abdelhafidh Dhrifi AP: the agricultural productivity measured by agriculture, value added (% of GDP). TI: represent the technological innovation indicator measured by agricultural machinery (tractors per 100 sq km of arable land). GDPG: the growth of GDP per capita. INQ: represent the income inequality measured by Theil Indexii. POP: represent the growth population. It is expected to have a negative effect on poverty reduction. TRADE: defined as the sum of exports and imports as a share of GDP. It is introduced into the model to capture the degree of international openness. In this context, Matsuyama (1992) suggests that the relation between agricultural growth and overall poverty depends on the openness of a country to international trade and that agricultural growth goes hand in hand with the with the increase in household income. FD: is an indicator of financial development measured by domestic credit to private sector to GDP. INF: The rate of inflation, it is introduced into the model to capture the impact of macroeconomic stabilization on poverty. Inflation is afact or worsening poverty because it has a negative impact on the real value of assets and the purchasing power of household incomes. It is measured by inflation consumer prices available in World Bank. AIL: Agricultural irrigated land. It is expected to have a positive effect on agricultural growth. EA: is employee’s agriculture. SCH: is the log of the average years of secondary schooling in the total population which measures human capital. TEL: is an indicator measuring the level of infrastructure. It is measured by the average of the number of telephone mainlines per 1000 people. How can Agricultural Growth Affect Poverty Reduction? Poverty equation shows that a change in AP by one unit causes poverty to change by an amount equal to 1 . Furthermore, poverty equation shows that a change in economic growth index by one unit causes poverty to change by an amount equal to  2 . However, agricultural growth equation shows that a change in AP by one unit can also induce a change in the 146 Journal of Economic and Social Studies �Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation economic growth index by an amount equal to  1 which means that the effect of change in AP by one unit is not limited to its direct influence on poverty, but also includes the indirect impact via economic growth channel. Thus, the total impact of AP on poverty equals the sum of direct impact and indirect impact. This effect can be calculated by finding the derivative of growth with respect to AP, which is equal to: Poverty Growth        * 1 2 AP 1 2 1 AP  4 (4) By the same, the total effect of technological innovation on poverty can be calculated by finding the derivative of poverty with respect to technological innovation, which is equal to: Poverty AP   Growth           3  1      *  2   3  1 * 2 3 2 TI TI   TI  3 1   5 Estimating the above complete system of equations and finding γ1, γ2,δ1, δ2 , δ3 and allows us to test whether and how agricultural growth and technological innovation affects poverty reduction. Sample and Data Sources Annual time series data, which covers the period 1990-2011, is utilized in this study. The data used in the study are obtained from the web site of the World Bank. The sample size and the period of our study are limited by the availability of data. Our sample is conducted for 32 countries in Sub-Saharan Africa in which the agricultural sector contributes at least 10 percent of the gross domestic product (GDP) and where the majority of the poor depends upon agriculture for their livelihood. Although the choice of countriesiii is governed by the availability of data, the included countries broadly cover the whole of SSA. Estimation Method In a simultaneous equation model, like the one developed in the previous section, a dependent variable in one equation can be an explanatory variable in other equations in the model. For example, in equation (3), AP 147 �Abdelhafidh Dhrifi is the dependent variable, which is determined by economic growth and other variables, but at the same time AP enters the growth equation (2), as an explanatory variable. As a result, some of the explanatory variables in simultaneous equation models are endogenous and, therefore, are correlated with the disturbance terms in all the structural equations of the model. As a consequence, using Ordinary Least Square, OLS, to estimate the structural equations will result in inconsistent estimates for the model parameters. A consistent estimation for the model parameters requires using an estimation method that can deal with the endogeneity problem. But before considering the method of the estimation, the identifiability of the model has to be checked because estimation methods that can be used in the context of simultaneous equation models are functions of identification criteria for estimating the model and the endogeneity problem. In our case, the model presented is over identified. On the other hand, our model is characterized by the presence of an endogeneity problem of order two, by definition, why the estimate by the method of least squares would be triple registered (For details on the method used, it is recommended to refer to the work of Bourbonnais, 2002). This estimation method is based on the principle of application of the method of least squares in three stages. The Agriculture Sector in Sub-Saharan Africa Although SSA countries are heterogeneous population, today remains predominantly rural (65%), assets are primarily in agriculture (60%) and rural agricultural households (95%) even though they are most often pluriactive. The rest of the working population is engaged in nonagricultural informal activities (25-30%), mainly urban, and in the formal sector industries and services (5 to10% maximum). Agricultural sector constitute the main economic mainstay of the region, and will remain so for the next fifteen years. This durable weight of agriculture is due to several factors: the lack of effective industrialization despite rapid urbanization, low prospects of development of other sectors in a highly competitive international context, a generalized pressure on labor markets makes it difficult to immigrate to developed countries. In this regard, the situation in SSA is particularly: if its demographic transition is committed and marked by a high mobility of the population (with urbanization rate which reach 40%, the urban population was multiplied by 12 since 1960), its economic structure has changed little: low diversification; a significant weight of agricultural activities in GDP, foreign trade and especially employment. Urbanization has developed without industrialization, unlike other parts of the world. 148 Journal of Economic and Social Studies �Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation Hence, if the potential of agriculture in sub-Saharan Africa is the engine of global growth for the majority of countries in the region and is essential for poverty reduction and food security, unexploited potential of this can significantly compromised the role that agriculture can play in reducing poverty (World Bank, 2007). Results and Interpretations Recall that the main aim of this paper is to test whether AP can affect poverty by positively influencing economic growth, and to evaluate the significance of any such effect taking into consideration the role of technological innovation. Thus, the parameters of interest in Table 1are: (1) The coefficient that describes the effect of AP on poverty, δ1 (2) The coefficient that describes the effect of economic growth on poverty, δ2. (3) The coefficient that describes the effect of AP on economic growth and (4) the coefficients that describes the effect of Technological innovation respectively on poverty, economic growth and agricultural growth δ3 , , and . Table 1. Simultaneous equation estimation of poverty, growth and agricultural productivity (3SLS) Variables AP GDPG TI INQ POP TEL INF TRADE Poverty 0.098 (2.62)** 0.252 (2.25)** 0.316 (4.19)** 0,213 (1,94)** 0.608 (0.88) 0.321 (1.77)* ----- GDP Growth 0.904 (2.56)** --0.025 (3.77)** -------0.03 (-0.52) 0.307 (2.69)** Agr. Growth --0.019 (5.63)*** -0.507 (-2.15)** ----------149 �Abdelhafidh Dhrifi SCH -0.022 --(2.45)** -FD -0.016 -(4.89)*** -AIL --0.451 --(2.04)** EA --0.73 --(1.75)* constante 0.213 -0.041 0.022 (5.24)** (-2.48)** (2.76)** Observations 704 704 704 2 R 0,431 0,383 0,294 Notes: * significant at 10% ** Significant at 5%; *** Significant at 1%. Table 1 report the estimation results of the simultaneous equation model using the 3SLS method for the period 1990-2011: The first column presents the estimation results of the poverty equation. In this equation, all the explanatory variables have the expected sign and are statistically significant, expect population growth which has the right sign but is not significant. The results demonstrate that per capita income growth has a significant poverty-reducing effect where a 1% increase in per capita incomes reduces poverty by 0.25%. In particular, the equation shows that the coefficient of agricultural growth, which most interests us in this estimate, it appears to be significantly positive showing the positive effects that can play agriculture on the processes of poverty reduction. A 1% change in agricultural productivity raises household final consumption expenditure by about 0.09%, confirming the important role of agriculture sector in SSA in reducing poverty rate. This result is consistent with many empirical studies on SSA (Tiffen, 2003; Diao et al. 2005, 2007 and Arega and Ousmane, 2009) that shows a significant role played by agriculture in SSA accelerating economic growth and, by consequently, reducing the poverty rate. Concerning the effect of inequality on the incidence of poverty, results shows that the coefficient of inequality measured by the Theil index is significantly negative, confirming its robustness. As an increase of this index by 1 percentage point leads to a decrease in household consumption expenditure by 0.21 point, which aggravates the poverty rate. This result seems to reinforce those obtained by various studies on the relationship between increasing inequality and poverty (Arega and Ousmane, 2009). This suggests that the most effective method 150 Journal of Economic and Social Studies �Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation to reduce the poverty rate is certainly reducing inequalities by means of a better redistribution of wealth. As regards the impact of technological innovation on poverty rate, the equation shows that the variable has positive and statistically significant direct impacts on poverty. An increase of technological innovation by 1% leads to decrease in poverty rate by 0.31 %. Finally, infrastructural quality, as captured by telephone line per 1000 people, play significant role in poverty alleviation. This result is consistent with the study of Parker et al., (2008) which showed that people must access to infrastructure services, such as mains water, safe sanitation, mains power supplies, maintained roads and telephones. This allows us to say that it is necessary to invest considerably in infrastructure because, as account given the low population density in SSA countries, the infrastructure that connects farmers to markets is costly and investment in road infrastructures, institutions and the public sector are essential. The second column in Table 1 presents the estimation results of the economic growth equation. We notice that all the explanatory variables have the expected sign and are statistically significant. Moreover, the results show that technological innovation, as captured by the agricultural machinery, tractors per 100 sq. km of arable land, play a significant role in determining economic growth and thereby in reducing poverty. The coefficient on agricultural growth is positive and statistically significant as expected. A 1% change in agricultural productivity raises GDP per capita by about 0.9%, confirming the heavy reliance of SSA economies on agricultural productivity. In this context, the World Development Report 2008 (World Bank, 2007) notes that GDP growth originating in agriculture is about four times more effective in raising incomes of extremely poor people than GDP growth originating outside the sector. The results show also that a higher level of human capital is associated with a faster economic growth rate. The third column in Table 1 shows the estimation result of the Agricultural Growth equation. As expected, the results indicate that AP is affected positively and significantly by economic growth. A 1 % change in per capita income growth raises agriculture productivity by about 0.02. As regards, agricultural machinery has a significant impact on agriculture productivity. Employee’s agriculture plays a significant role in agriculture performance. Consistent with the fact that labor is a critical constraint in Sub-Saharan African agriculture, it has the largest productivity elasticity of 0.73, implying that a 1% change in employee’s agriculture raises agriculture productivity by about 0.73%. The results show that agricultural irrigated land has a positive and significant impact on 151 �Abdelhafidh Dhrifi agriculture growth and consequently on poverty eradication. Probably due to the dominance of rain fed, rather than irrigated, agriculture in SSA, irrigation has turned out to have insignificant effect on agricultural productivity. Determining the Total Effects of Agriculture and Technological Innovation on Poverty Alleviation Table 2 and 3 summarizes the results regarding the impact of AP and technological innovation on poverty: As reported in the Table 2, the results show the direct impact of AP on economic growth where an increase in AP by one point leads to a decrease in poverty by 0.098 point. Concerning the indirect impact of AP on poverty, it can be computed by the product of the coefficient of economic growth in the poverty equation and the coefficient of AP in the growth equation (δ2*γ1 = 0.015). Thus, the combined effects suggest that the total impact of AP on poverty is equal to the sum of the direct and indirect effect which is equal to 0.325 which indicates that an increase in AP by one point leads to decrease in the rate of poverty by 0.325 point. Table 3 shows that, the elasticity presented, represent the percentage change in poverty associated with a 1% change in technological innovation. The elasticity of poverty with respect to technological innovation is 0.18, implying that a 1% increase in technological innovation decreases poverty by 0.18%. Moreover, an improved of technological innovation by one point leads a decrease in poverty rate by 0.184 point divided between a direct effect of 0.116 point and a indirect effect via stimulating agriculture performance and economic growth by 0.068 point. Table 2. The impact of agriculture on poverty the direct impact of agriculture on poverty The coefficient The estimated coefficient 152 the indirect impact of agriculture on poverty (δ2 *γ1) 0.098 0.252*0.904=0.227 The total impact on poverty + (δ2 *γ1) 0.325 Journal of Economic and Social Studies �Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation Table 3. The impact of technological innovation on poverty the direct impact of technological innovation on poverty The coefficient The estimated coefficient the indirect impact of technological innovation on poverty via via economic agriculture growth  * 2  3   * 2 0.002 0.066 1 0.116 1 0.068 The total impact on poverty    *  2   3   * 2 3 1 1 0.184 Overall, the results presented above make it very clear that AP has a significant impact on poverty beyond its direct and indirect impact; an impact that works via improving the economic growth. The results also show that the indirect impact is of considerable volume and is comparable to the direct or traditional impact. More importantly, the results indicate that the indirect impact of AP on poverty is far greater than, or more than the double that of the direct impact of AP on poverty. By the same, the results presented shows that technological innovations play an important role in determining the relationships between agricultural performance and poverty and that through its direct and indirect impact via economic growth and agriculture productivity. Finally, we notice that the empirical results presented above are based on a sample of 32 countries, which is quite small number. The reason for using this small sample is the lack of data for some variables of some countries. As a consequence, the results might be sensitive to the sample choice. Moreover, the results might be sensitive to model specification and the choice of the controlling variables. Thus, in following research, the robustness of the results can be tested: by using a larger country sample, and second, by controlling for more poverty determinants. Conclusion This paper set out to tackle two very specific research questions concerning (1) the importance and magnitude of agricultural productivity on poverty alleviation (2) the relationship between technological innovation, agriculture productivity and poverty. Using an aggregate 153 �Abdelhafidh Dhrifi annual panel data, on a sample composed of 32 Sub-Saharan Africa countries, from 1990-2011 to estimate a simultaneous equation model that capture the interrelationship between agriculture productivity, technological innovation and poverty, our findings indicate that agricultural growth contributes significantly to poverty alleviation in SSA. The results suggest that agricultural growth would lead to a 32% decrease in poverty: this effect is divided on a direct impact of 0.98% and an indirect impact via economic growth equal to 0.22%. As regards the effects of technological innovation on poverty, results demonstrate that 1 % change in technological innovation leads to a decrease in poverty rate by 0.18 %. This implies that SSA countries accelerating growth agriculture is fundamental to reduce poverty and allow countries to achieve economic transformation. This passes through the ability of agriculture to generate employment, to stimulate the economy through linkages, and to reduce the real cost of food accounts. It also requires that the Government must intervene to invest in new technology in order to allow farmers to benefit from the fruits of technological innovation and that, by improving agricultural productivity and consequently reducing the poverty rate. Hence, the positive prospects for SSA agriculture will not take shape without a concerted and determined political action, especially if agricultural growth must be sustainable and result in a significant reduction in poverty. Many problems must be overcome, including the growing technological gap, the slow development of markets for inputs and outputs and services associated markets, the slow progress of regional integration, lack of governance and institutional weakness in some countries, conflict, HIV-AIDS and other diseases. Linking small farmers to markets and help them adapt to new conditions and become more productive, increase rural employment opportunities, reduce risk and vulnerability, especially climate extremes and fluctuations prices and improve access to resources and skills will be among the measures to be taken to ensure that agricultural and rural growth goes hand in hand with poverty reduction. References ABARE (2001). The impact of agricultural trade liberalization on developing countries. ABARE Research Report No. 01.6. 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World Bank, Washington, DC, USA. iAgricultural productivity is defined as agricultural value added per hectare of agricultural land where: (i) value added in agriculture measures the output of the agricultural sector less the value of intermediate inputs; (ii) agriculture comprises 157 �Abdelhafidh Dhrifi value added from forestry, hunting, and fishing as well as cultivation of crops and livestock; and (iii) agricultural land is measured as the sum of arable land, permanent cropland, and permanent pasture (World Bank, 2007). iiThis indicator is calculated by the University of Texas. It is available on the http://utip.gov.utexas.edu site. iiiThe list of countries are : Benin, Botswana, Burkina Faso, Burundi, Central African Republic, Cote d’Ivoire, Djibouti, Ethiopie, Gambie, Ghana, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Nigeria, Rwanda, Senegal, South Africa, Swaziland, Tanzanie, Togo, Uganda, Zambie and Zimbabwe. 158 Journal of Economic and Social Studies � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2400 Title A name given to the resource Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation Author Author Dhrifi, Abdelhafidh Abstract A summary of the resource. The role of agriculture in economic development remains much debated. This paper takes an empirical perspective and focuses on the relationships between agriculture productivity and poverty reduction. The contribution of agriculture sector to poverty is shown to depend on its own growth performance, its indirect impact on growth in other sectors, the extent to which poor people participate in the sector, and the size of the sector in the overall economy. Bringing together these different effects and taking into consideration the role played by technological innovation, we use an aggregate annual panel data, on a sample composed of 32Sub-SaharanAfrica (SSA) countries, from 1990-2011 to estimate a simultaneous equation model that capture the interrelationship between agriculture productivity, technological innovation and poverty. Findings show first that agricultural productivity contributes significantly to economic growth and poverty in SSA. Second, technological innovation appears to have a positive and significant impact on poverty through its direct and indirect impact through agriculture productivity and growth. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-03-15 Keywords Keywords. Article PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/b3a4c23e3c75bd8d079abd4a3a226c81.pdf 6ea6aa2e07e1a844f635e9d1d31db0c6 PDF Text Text Journal of Economic and Social Studies Conflict and the Freedom of the Press Jayoti Das The Love School of Business Elon University Elon, NC 27244 dastina@elon.edu Cassandra E. DiRienzo The Love School of Business Elon University Elon, NC 27244 cdirienzo@elon.edu Abstract: Using data from 146 countries, this study empirically tests the relationship between conflict and press freedom. Holding all else constant, the results indicate that the relationship between conflict and press freedom is best described as nonlinear such that the greatest conflict is observed at an intermediate level of press freedom. It is theorized that while past research has found that greater press freedom serves to reduce conflict, governments with a tightly controlled press can also observe lower levels of conflict as these government can use their control to censored information, images, and messaging to minimize conflict and unrest. Keywords: Conflict, Press Freedom, Nonlinear, CrossCountry JEL Classification: O57, F50 Article History Submitted: 15 December 2012 Resubmitted: 17 December 2012 Resubmitted: 2 July 2013 Accepted: 24 July 2013 91 �Jayoti Das, Cassandra E. DiRienzo Introduction Conflict borne from ideological, economic, political, or religious differences and disagreements has plagued societies for as long as records have been kept. Today, those with access to the internet, television, radio, or newspapers, can seek regular updates from a variety of news media regarding the status of local, national, and/or international conflicts as it is unfolding. The updates provided by news media can portray a sense of continued suffering and loss, or perhaps offer hope that a resolution and ceasefire is near. As Puddephatt (2006) discusses, attitudes and opinions toward a particular conflict, as well as its likely outcome, can be strongly influenced by the news media. In other words, the approach and perspectives a news media outlet takes in sharing and disseminating information on a conflict can shape public opinion and, in extreme cases, influence the outcome. History offers several examples of news media influencing public opinion and inciting violent conflict as well as pleading for conflict resolution. As Puddephatt (2006) describes, media sources served as agents for extreme nationalism during the wars in the Balkans that continually fueled tensions, resulting in the collapse of former Yugoslavia. Further, Puddephatt (2006) notes the role of some Rwandan media sources in directly inciting genocide as well as offering other examples such as the Soviet Union and the Nazis who used their control over the media to create weaker societies that they could more easily manipulate. Recently, according to the, the Radio and Television Supreme Council (RTÜK), the Turkish government radio and television regulating body, fined a number of Turkish news channels for "harming the physical, moral and mental development of children and young people" by broadcasting coverage of the Gezi Parki Uprisings in Taksim Square, Istanbul, Turkey (Hürriyet Daily News, June 12, 2013). Sixty-two Turkish journalists were later imprisoned for ignoring government warnings to cease broadcasting and publishing information regarding the uprisings. Alternatively, several international media outlets have recently called upon the global community to act to resolve the conflict in Syria. Over the past several decades, international media has become increasingly involved in exposing the conflicts and suffering in several Sub-Saharan countries and have continually pressed for international aid and support. Given the power of media to influence public opinion by either fueling tensions or calling for resolution and peace, the question arises as to how this power is affected by press freedom. In other words, what is the relationship between freedom of the press and conflict? 92 Journal of Economic and Social Studies �Conflict and the Freedom of the Press Pal (2011) finds empirical evidence that unregulated media can reduce different forms of socio-political instability, suggesting that a free media can serve to promote peace. Pal (2011) theorizes that unregulated national media has a greater ability to share news on an international stage and this international exposure can lead to external pressure on governments to act in the best interest of their citizens, which includes resolving conflicts. Fish and Kroenig (2006) offer evidence that conflict is negatively associated with more democratic nations; considering that greater freedom of the press is generally found in more democratic nations, this study offers further evidence that greater press freedom is associated with a more peaceful nation. Nonetheless, it should be noted that in some countries where media is highly regulated, such as China, Singapore, Qatar, North Korea, and United Arab Emirates, there is also relatively low levels of conflict. While past research has generally found that greater press freedom is associated with a more peaceful state, one can also point to several examples of countries with highly regulated press freedom that experience relatively low levels of conflict. It is suggested here that while a free media can serve to reduce conflict by calling on the international community and external forces to resolve conflicts, a government that controls the media can also manage the message and control public opinion in an effort to minimize or even prevent uprisings. The primary objective of this study is to test the hypothesis that the relationship between press freedom and conflict is not linear; rather it takes an inverted U-shape such that the least conflict is observed when press freedom is both highly unregulated and regulated, but peaks at some intermediate level of freedom. It is theorized that while greater press freedom can lead to less conflict as the media is free to expose the sources of the conflict and call upon domestic and international leaders to resolve issues, a government that regulates the media also controls the information that is disseminated and the messaging, which can prevent conflict from initiating. Thus, it is when the press freedom is at some intermediate level and the media cannot fully reach out to external sources, nor can the government fully control the message, that nations observe the greatest conflict. This hypothesis is tested using a crosscountry data set of 146 countries, while controlling for other factors known to affect conflict. Conflict and Media Freedom Puddephatt (2006) states that role the media takes in a given conflict depends on a multitude of complex factors, including the degree of independence the media has relative to those in power. In regards to an 93 �Jayoti Das, Cassandra E. DiRienzo unregulated press, the benefits of a free media are widely recognized. As Norris and Zinnbauer (2002) discuss, societies with widespread access to an independent free press tend to also enjoy governments with greater administrative efficiency, improved social and economic conditions, and less corruption. Bhathangar (2000) also notes that with greater access to unrestricted information such as the Internet there is also greater transparency and accountability throughout all facets of the government. It is widely accepted that nations with a free, unregulated media tend to be more economically and politically stable, enjoy greater efficiency and transparency, and experience lower levels of corruption (Ades and Di Tella, 1999; Treisman, 2000; and Wei, 2000). Further, as Pal (2011) finds, through its ability to share news on an international stage, an unregulated media has the ability to expose corruption and sources of contentious issues, putting pressure on governments to act in the best interest of their citizens, which includes working to prevent conflicts from occurring as well as resolving conflicts that do arise. Thus, an additional benefit of a free media is that is serves to reduce conflict. Nevertheless, it cannot be overlooked that some countries with highly regulated media also experience low levels of conflict. As noted above, countries such as China, Singapore, Qatar, North Korea, and United Arab Emirates, among others, have comparatively restricted media, but also enjoy relatively fewer uprisings and conflict. It is argued here that governments with control over the media can regulate the messages and images to mask potential sources of contention, thereby reducing the need or desire for uprisings. Further, through the use of propaganda, a regulated press can be used to promote national identity and image to dissuade internal uprisings against the government. In other words, if the government has control of the images, messages, and actual content of the news shared with its citizens, it has the ability to minimize uprisings and other sources of conflict. Given the theoretical arguments presented for both highly unregulated and regulated media to be able to reduce conflict, it is hypothesized that, after accounting for the other factors known to affect conflict, the greatest conflict will be observed at some intermediate level of press freedom. At this intermediate level, the media is not fully able to expose, nor disseminate information on potential sources of contention, nor fully exercise its ability to call on external sources for assistance. Further, without tighter controls, the government is not able to regulate all messaging and imaging. In other words, in regards to minimizing conflict, the benefits of an unregulated media as well as a highly regulated media cannot be observed. Thus, it is hypothesized that: 94 Journal of Economic and Social Studies �Conflict and the Freedom of the Press H1: Controlling for other factors known to affect conflict, press freedom has an inverted U-shape relationship with conflict such that countries with an intermediate level of press freedom experience the greatest levels of conflict. Data Measures and a Preliminary Analysis Conflict Conflict is a broad term that can be used to describe a wide range of disagreement and contention that may or may not include violent acts. In this study we use the 2012 Peace and Conflict Instability Ledger data (PCI), published by the Center for International Development and Conflict Management in the 2012 Peace and Conflict report created by Hewitt et al. (2012), to define and measure conflict at the country level. The PCI data is based on an analysis of the drivers of internal war and regime collapse and provides the estimated risk of a country experiencing major bouts of political instability or armed conflict in the three year period from 2010 to 2012. As discussed in the 2012 Peace and Conflict report, the risk estimates are obtained from a forecasting statistical model that uses the most current data for several variables that have been identified as strongly correlating with the onset of political instability and armed conflict. To define political instability within each country, Hewitt et al. (2012) considers events such as revolutionary wars, ethnic wars, adverse regime changes, and genocides over the period 1955 to 2006. Hewitt et al. (2012) state that while this set of events is notably heterogeneous, the onset of any one of these events has been identified as being a precursor to a period of time in which the government’s ability to deliver critical services and exercise meaningful authority is hampered. To identify the underlying factors that lead to wars, adverse regime changes, and genocides and create the PCI data, Hewitt et al. (2012) used approximately 60 years of data over the period 1955 to 2006 and performed a series of empirical studies. The results of these analyses indicated that instability can emerge from a combination of five factors; institutional consistency, economic openness, infant mortality rates, militarization, and neighborhood security. Institutional consistency captures the degree to which political institutions are mixed in regards to democratic and autocratic features and, all else equal, countries with a greater mix are more likely to experience political instability. Economic openness considers the extent to which a country is integrated into the global economy and countries that are more economically open and 95 �Jayoti Das, Cassandra E. DiRienzo globally connected have been found to experience less instability. Infant mortality rates serve as a measure of a country’s overall level of economic development, social welfare, and its ability to deliver critical services to its citizens. As noted in Hewitt et al. (2012), there is significant research to suggest a strong relationship between a high infant mortality rate and the likelihood of future instability. Further, militarization, or access to weapons stock and military skill and training, is also accounted for as Hewitt et al. (2012) state that instability is most likely in countries where the opportunities for armed conflict are the greatest. Finally, neighborhood security is included as Hewitt et al. (2012) note that the likelihood of political instability within a country increases when a neighboring country is currently experiencing instability. Thus, the PCI data is based on these five factors as indicators of future conflict, which is defined as internal war and regime collapse, or political instability. The PCI data is available for 163 countries and provides a risk score for each country. The risk score represents the relative risk, compared to the average member of the OECD, of experiencing instability over the next three years. From the 2012 dataset, the countries with the highest PCI data, or greatest risk of instability, are Afghanistan, the Democratic Republic of Congo, Burundi, Guinea-Bissau, and Djibouti with risk scores of 36.4, 29.8, 24.5, 23.9, and 23.5, respectively. On the other end of the spectrum, the countries with the smallest PCI values, or least risk, are Austria, Denmark, Finland, Ireland, Netherlands, Norway, Slovenia, and Sweden, which all have risk scores of 0.2. Indonesia, Sri Lanka, and Niger have risk scores that are near the average of the PCI data with values of 5.2, 5.2, and 5.3, respectively. Press Freedom The 2009 Freedom of the Press (FP) index published by Freedom House is used to measure the media and press freedoms that are afforded by a country. A free and unregulated press represents an unrestricted and uncensored flow of information through all forms of press and news media. According to Freedom House (2009), a free press plays an important role in supporting a healthy democracy and stable government, all of which serves to minimize conflict. The FP index is used in this study rather than other measures of quality of government or personal freedoms, as the focus of this analysis is on press freedom, or the degree to which the news media is unrestricted to disseminate information. Past research such as Brunetti and Weder (2003), Chowdhury (2004), and Serra (2006) have also used the FP index to proxy press freedom and freedom of information. 96 Journal of Economic and Social Studies �Conflict and the Freedom of the Press Published annually, the FP index is based on a set of 23 survey questions completed by overseas correspondents, international visitors, reports from human rights and press freedom organizations, governments and multilateral bodies, as well as experts in geographic and geopolitical areas, domestic and international news media, among others (Freedom House, 2009). According to Freedom House 2009, the survey questions are designed to assess the legal, political, and economic environments in which the media operates and considers issues such as the legal and constitutional guarantees of press freedom, penalties for libel, penal codes, editorial independence of the media, intimidation and threats to journalists, the existence of competitive pressures leading to biased press reports and investigations, among many others factors deemed to affect the freedom of the press. Each country receives an FP value, which represents the overall quality of the legal, political, and economic environment in which the media operates, and the index ranges from 0, most free, to 100, least free. From the 2009 FP data, Finland, Norway, Sweden, and Belgium were recognized as having the greatest levels of press freedom with FP values of 10, 11, 11, and 12, respectively, while Eritrea, Libya, Myanmar, Uzbekistan, Turkmenistan, and North Korea were ranked as least free with FP values of 94, 94, 94, 94, 96, and 97, respectively. Preliminary Analysis In order to explore the possible non-linear relationship between conflict and freedom of the press, a scatter plot with a fitted polynomial line between the two indices is shown in Figure 1. As shown in Table 1, the coefficients in the fitted polynomial model are statistically significant at 99% confidence and the model has an Adjusted R2 value of 0.164. A linear model was also estimated and, while the coefficient on FP is statistically significant, the Adjusted R2 value was notably lower at 0.073. These results offer some preliminary evidence that a non-linear, U-shaped relationship between conflict and press freedom may exist. However, before this relationship can be tested and more thoroughly explored, the other factors known to affect conflict need to be accounted for and the following section describes the control variables employed. 97 �Jayoti Das, Cassandra E. DiRienzo Figure 1. Conflict and Freedom of the Press 40 35 Conflict (PCI) 30 25 20 15 10 5 0 0 20 40 60 80 100 Freedom of the Press (FP) Table 1. Conflict and Freedom of the Press Estimated Linear and Polynomial Models Coefficient Estimate Std Err Intercept FP FP FP2 p-value 1.43 1.156 1.24 0.2175 0.08** 0.020 3.71 0.0003 t Stat p-value Coefficient Estimate Std Err Intercept t Stat -6.25** 2.1000 -2.978 0.0033 0.450** 0.0900 5.037 <0.0001 -0.004** 0.0008 -4.291 <0.0001 Adj. R2 0.073 Adj. R2 0.164 *p<0.05; **p<0.01 98 Journal of Economic and Social Studies �Conflict and the Freedom of the Press Control Variables and Descriptive Statistics Democracy While the PCI data does consider the degree to which a country’s political institutions are mixed in terms of democratic and autocratic features, the data does not include the overall level of democracy within a country, which is commonly controlled for in conflict studies. Specifically, in a cross-sectional analysis of 140 conflict-stricken and non-conflict stricken developing countries, Kim (2006) finds that nondemocratic political systems with little to no political freedoms were less capable of managing and resolving events of crisis and conflict. In a panel data analysis of 179 countries over the period 1968 to 2003, Bloomberg and Hess (2005) also find that the level of violent terrorist activities generated within a country is negatively related to the degree of democracy. In a comprehensive study exploring the robustness of previous findings on the determinants of terrorism, Gassebner and Luechinger (2011) find that a strong and impartial judicial system and respect of physical integrity rights, which are common characteristics of a more democratic society, are associated with lower levels of terrorism. Further, in a study exploring the determinants of socio-political instability, Pal (2011) uses a panel data from 98 countries over the period 1994 to 2005 and controls for the level of democracy. Given these findings and the general consensus within the literature that greater democracy is generally associated with less conflict and violence and greater stability, democracy is controlled for in this analysis. The 2010 Economist Intelligence Unit’s (EIU)Index of Democracy is used to proxy the level of democracy within a country and has been used in many studies, such as Sung (2004) and Kaufmann et al. (2009), to approximate country democracy. The EIU is a broad measure of democracy and is based on five categories; electoral process and pluralism, civil liberties, the functioning of the government, political participation, and political culture. On each of these five categories, countries are scored on a scale of zero to ten and the EIU index is the unweighted average of the five scores. Thus, the EIU data ranges from zero to ten and countries with scores closer to ten represent the highest levels of democracy. Diversity Ethnic and linguistic diversity has also been linked to various measures of conflict, violence, and unrest as past research has generally found that greater ethnic and linguistic diversity measures tend to be associated with 99 �Jayoti Das, Cassandra E. DiRienzo greater conflict and civil disturbance. Specifically, Kim (2006) finds that more ethnically homogeneous countries were less likely to experience internal conflict and Buhaug et al. (2008) find that politicized ethnicity is a major determinant of internal conflict. In a cross-country study exploring the determinants of terrorism, Abadie (2005) finds that greater levels of linguistic diversity increased the likelihood that a country will experience terrorist attack. The 1985 Ethnolinguistic Fragmentation (ELF) Index, originally developed by Taylor and Hudson (1972), is used to measure country ethnic and linguistic diversity. The index measures the probability that two randomly selected individuals from a particular country will belong to different ethno-linguistic groups. Thus, the index ranges from zero to one such that countries with values close to zero are very homogeneous in regard to ethnic and linguistic diversity. While other measures of diversity are available, the ELF index has been used in many studies, such as Easterly and Levine (1997), Mauro (1995), La Porta et al. (1999), and Alesina et al. (2003), which have explored the impact of diversity on a variety of country factors. Education The level of education has also been found to significantly affect conflict and violence associated with terrorism. In regard to terrorism, Azam and Thelen (2008) use a panel data set of 176 countries from 1990 to 2004 and find that terrorist attacks are negatively related to the level of education. Further, in a cross-country study over the period 1997 to 2004, Bravo and Dias (2006) conclude that terrorism is more likely to occur in countries with lower levels of education, which coincides with Krueger and Laitin's (2008) findings that education levels are linked, albeit weakly, to terrorism. Further, in his study exploring the determinants of socio-political instability, Pal (2011) also controls for the level of education. The 2009 Education Index (EDI), one of the three sub-indices that makeup the Human Development Index that is published by the International Human Development Program, is used to measure the average level of education in a country. The EDI is based on the mean years of schooling of adults and the expected number of years of schooling for children. The data is normalized and is scaled on a zero to one range such that values closest to one represent countries with the greatest education attainment. 100 Journal of Economic and Social Studies �Conflict and the Freedom of the Press Geographical Characteristics Country geographic characteristics such as the geographical size of the country, its average elevation, and the proportion of the country in a tropical climate have also been identified as significant conditions that can contribute to the likelihood of civil unrest, violence, terrorism, and other forms of conflict. When countries are more difficult to traverse; for example, they have large tropical forests or mountainous terrains, these regions can provide terrorist and other rebel groups with secluded areas to operate and train. Further, geographically large countries tend to have more dispersed populations, which can lead less societal cohesiveness and unity. Considering that conflict will be more predominate in less unified societies, by extension, larger geographical countries can then be more likely to experience conflict. Further, previous empirical research supports these relationships. In a cross-country study using data over the period 1960 to 1999, Collier and Hoeffler (2004) find that the risk of civil war is higher in more mountainous countries and countries with more unequally distributed populations. Further, Abadie (2005), Buhaug et al. (2008) and Fearon and Laitin (2003) also find that rough terrain is a significant determinant of internal and external country conflict. Finally, Pal (2011) also controls for geographical characteristics in his analysis exploring the determinants of socio-political instability. The geographical characteristics of country land area, average elevation, and the percentage of the tropical area are controlled for in this analysis. These data are provided by the World Bank and country area (Area) represents the size of country measured in square kilometers (in millions), elevation (Elev) represents the average elevation of the county above sea level in meters, and tropical area (Trop) measures the proportion of the country land area that experiences tropical weather. Economic Development The level of economic development is commonly controlled for in studies exploring conflict, terrorism, or other forms of violence and civil unrest as Tures (2003) states that developed countries are less likely to experience conflict as they have achieved a level of wealth to satisfy their domestic population. In regards to civil wars and unrest, Collier and Hoeffler (2004) and Fearon and Laitin (2003) find that less economically developed countries are more likely to experience civil war and unrest. Further, in an analysis exploring the relationship between democracy and civil war and violence, Gleditsch and Ruggeri (2010) control for the level of economic development as does Pal (2011). 101 �Jayoti Das, Cassandra E. DiRienzo The level of economic development is measured by the natural log of 2009 GDP per capita (LnGDPPC), which is available through the World Bank. Descriptive Statistics The data described above is available for 146 countries and this sample is used explore the relationship between conflict and press freedom, as measured by the PCI and FP data, respectively, as well as test H1. Table 2 provides a summary of the data used as well as the descriptive statistics. The most recent 2012 PCI data is used and, given that the effect of the control variables cannot be expected to occur immediately, the control variables are lagged by approximately two years with the one exception of the 1985 ELF data. The 1985 data is the most recent data available for ELF; however, this data is still considered accurate as ethno-linguistic diversity is relatively constant through time. Further, through a series of preliminary analyses, the relationship between the PCI data and the other variables is best described as linear in the log of PCI. Thus, the descriptive statistics reflect the natural log of the PCI data, LnPCI. 102 Journal of Economic and Social Studies �Conflict and the Freedom of the Press Table 2. Variable Summary and Descriptive Statistics Variable Proxy (Name, Year Reported) Mean St. Deviation N Conflict Peace and Conflict Instability (LnPCI, 2012) 0.89 1.40 163 Press Freedom Freedom of the Press (FP, 2009) 51.48 23.56 162 Democracy Economist Intelligence Unit (EIU, 2010) 5.38 2.21 161 Diversity Ethno-linguistic Fragmentation Index (ELF, 1985) 0.47 0.27 161 Education Education Index (EDI, 2009) 0.63 0.21 158 Land Area World Bank (Area, NA) 829,760 2,062,539 154 Avg. Elevation World Bank (Elev, NA) 629.38 565.03 154 Tropical Area World Bank (Trop, NA) 0.47 0.48 154 GDP per Capita, World Bank (LnGDPPC, 2009) 7.67 1.56 157 Economic Development A Pearson correlation matrix of all of the variables used in the analysis is presented in Table 3. Considering that greater LnPCI values are associated with higher levels of conflict, the correlations have the expected signs. Specifically, LnPCI is negatively and significantly correlated with EIU, EDI, and LnGDPPC. The negative and significant correlation values indicate that, on average, less conflict stricken countries tend to be more democratic and have higher levels of education and economic development. The LnPCI is also positively and significantly correlated with FP, ELF, Elev, and Trop. These correlations suggest that, on average, less conflict stricken countries tend to have greater press freedoms, are 103 �Jayoti Das, Cassandra E. DiRienzo more ethno-linguistically homogeneous, and have higher average elevations and a greater proportion of land area that experience tropical weather. While conflict as proxied by LnPCI is significantly correlated with the geographical characteristics of average elevation and tropical weather, it is not significantly correlated with country land area. Table 3.Correlation Matrix LnPCI FP EIU LnPCI FP EIU ELF 1 0.43** -0.49** 0.45** 1 -0.89** 0.10 1 -0.22** EDI -0.76** -0.48** 0.63** Area Elev -0.02 0.32** 0.04 0.21** 0.05 -0.17* 1 0.43** 0.05 0.09 Trop 0.56** 0.26** -0.30** 0.47** LnGDPPC -0.84** -0.51** 0.61** 0.45** *p ELF EDI Area Elev Trop LnGDPPC 1 0.11 -0.12 0.65** 0.81** 1 0.04 1 -0.09 -0.12 1 0.13 0.26** 0.55** 1 <0.05; **p<0.01 Regression Analysis To explore the relationship between conflict and press freedom, the following preliminary regression model (Model 1) using FP and the control variables is first estimated: LnPCI  o  1FP   2 EIU  3 ELF   4 EDI  5 Area  6 Elev  7Trop  8 LnGDPPC   (1) As shown in Table 4, the Adjusted R2 of 0.7572 and significant F test statistical offer statistical support for this preliminary model. All of the coefficients on the control variables are significant and have the expected signs with the exception of the coefficients on EIU and Area. Interestingly, the coefficient on FP is not significant, indicating that when country democracy, ethno-linguistic diversity, education, economic development, and geographical characteristics are accounted for, a linear relationship between press freedom and conflict is not statistically significant. 104 Journal of Economic and Social Studies �Conflict and the Freedom of the Press Table 4. Regression Results Model 1 Dependent LnPCI Coefficient Std Err t Stat Estimate Intercept 4.266** 0.76 5.58 FP 0.004 0.006 0.80 EIU 0.096 0.070 1.38 ELF 0.526* 0.265 1.98 EDI -1.683** 0.583 -2.89 Area 0.00000005 0.00000003 1.80 Elev 0.00032** 0.00011 2.84 Trop 0.378** 0.180 2.10 ** LnGDPPC -0.490 0.069 -7.07 Adj. R2 = 0.7572 F stat = 57.33***p <0.05; **p<0.01 p-value <0.0001 0.4247 0.1710 0.0494 0.0045 0.0746 0.0052 0.0038 <0.0001 To test the hypothesis that the relationship between conflict and press freedom is nonlinear such that the relationship between LnPCI and FP has an inverted U-shape, Model 2 is estimated, which includes the squared FP term: LnPCI   o  1 FP   2 FP 2   3 EIU   4 ELF   5 EDI   6 Area   7 Elev   8Trop   9 LnGDPPC   (2) As shown in Table 5, the Adjusted R2 increases to 0.8019. Further, a partial F test indicates that the addition of the squared FP term offers statistically significant explanatory power to the model. The coefficients on the control variables are significant and have the expected sign with the one exception of EIU, which remains insignificant. Perhaps the most interesting result from Model 2 is that the coefficient on FP is positive and significant and the coefficient on FP2 is negative and significant. These results suggest that, after controlling for democracy, ethno-linguistic diversity, education, economic development, and country geographical characteristics, there is a nonlinear relationship between conflict and press freedom. The nonlinear relationship indicates that, after controlling for other factors known to affect conflict and instability, conflict is minimized when the press is highly free and tightly controlled, but peaks at an intermediate level of press freedom, which supports H1. Previous research suggests that an unrestricted press is able to expose issues that could potentially result in conflict and call upon the global community to resolve conflict. It is theorized here that a highly restricted press allows government official to regulate all messaging and imaging, which can be managed such that conflict is minimized. Thus, it is at an intermediate 105 �Jayoti Das, Cassandra E. DiRienzo level of press freedom, when the media is not able to disseminate fully unrestricted information and the government is not able to fully control all messaging and imaging, that the greatest levels of conflict and instability are observed. Using the estimated results, LnPCI is maximized when FP is approximately equal to 54.6, which is found by solving for the first order condition and using the estimated results from Model 2. Table 5. Regression Results Model 2 Dependent LnPCI Coefficient Std Err t Stat Estimate Intercept 2.330** 0.771 3.02 FP 0.072** 0.013 5.52 FP2 -0.00066** 0.00012 -5.65 EIU 0.040 0.064 0.63 ELF 0.492* 0.240 2.06 EDI -1.346* 0.530 -2.54 Area 0.000000057* 0.000000026 2.23 Elev 0.00027* 0.0001 2.59 Trop 0.330* 0.163 2.03 LnGDPPC -0.394** 0.065 -6.09 2 Adj. R = 0.8019 F stat = 66.23***p <0.05; **p<0.01 p-value 0.0030 <0.0001 <0.0001 0.5327 0.0418 0.0122 0.0274 0.0105 0.0445 <0.0001 To further explore the nonlinear relationship, the estimated PCI values are calculated using the estimated regression results from Model 2 and evaluating all of the independent variables at their means with the exception of FP. Figure 2 illustrates the estimated values of PCI against the FP values that range from zero, completely free press, to 100, completely restricted press. 106 Journal of Economic and Social Studies �Conflict and the Freedom of the Press Figure 2. Estimated PCI values and FP 4 Estimated PCI 3.5 3 2.5 2 1.5 1 0.5 0 0 20 40 60 80 100 As noted above, conflict is estimated to peak when FP is approximately 54.6 when all other control variables are held at their mean values. Examples of countries with FP values close to 54.6 are Bangladesh, Republic of Congo, Kenya, Senegal, Turkey, and Uganda, which all have an FP value of 54 and PCI values of 12, 2.7, 11.5, 8, 6.1, and 10.7, respectively. With the exception of the Republic of Congo, each of these countries has an above average PCI value. It is important to note; however, that a country with an FP value close to 54.6 will not necessarily also have a high PCI value as the other control variables, diversity, education, economic development, and geographical characteristics also play an important role in determining the level of conflict and instability a country faces. Keeping this caveat in mind, Guinea Bissau, Nigeria, and Sierra Leone are examples of countries that have an intermediate level of press freedom with FP values of 52, 53, and 57, respectively, but high PCI values of 20.7, 17.8, and 23.9, respectively. Further, Finland, Norway, Sweden, Belgium, Denmark, and Switzerland are examples of countries with some of the highest levels of press freedom (10, 11, 11, 12, 13, and 13, respectively) that also have some of the lowest levels of conflict with PCI values of 0.2, 0.2, 0.2, 0.7., 0.2, and 0.3, respectively. On the other end of the spectrum, Belarus, Libya, Uzbekistan, and Turkmenistan represent the countries in the data set with the most restricted press with FP values of 93, 94, 94, and 96, respectively that also have relatively lower levels of conflict with PCI values of 0.6, 0.9, 1.1, and 1.3. 107 �Jayoti Das, Cassandra E. DiRienzo Summary and Discussion Using data from 146 countries, this study empirically tested the relationship between conflict and press freedom, as proxied by the PCI and FP data, respectively. After controlling for other factors known to affect conflict within a country, the results indicate that the relationship between conflict and press freedom is best described as nonlinear. Holding all else constant, the estimated equations suggest that conflict is minimized at both the unrestricted and restricted ends of the press freedom spectrum and reaches a maximum at an intermediate level of press freedom. If the control variables are held at their mean values, conflict is estimated to peak when FP is approximately 54.6. Past research has argued that greater press freedom allows the media to freely disseminate information and expose corruption or other issues that may incite conflict; thereby creating a disincentive for officials or other parties to partake in such activities, which minimizes the potential for conflict. Further, past research has argued that a free press is able to call upon the global community to assist when conflicts do arise and this external pressure can encourage government officials to address and resolve contentious issues before conflict and unrest occurs. Nonetheless, it is theorized here that a highly restricted press could also serve to reduce conflict as a government can use its control over the media to send censored information, images, and messaging that prevents conflict and unrest. The censored media could be used to bolster national pride and create positive public opinions; all of which could serve to reduce conflict. This study offers empirical support for this hypothesis. Nonetheless, it is not suggested here that media freedom should be restricted in an effort to reduce conflict, rather it is the authors’ intention to bring awareness to the literature that governments with tight control over the media can use this power to prevent conflict and uprisings by preventing its citizens to fully understand and be aware of issues that can cause conflict and unrest. It should also be noted that a government with strong control of the media can also use this power to incite anger and provoke attacks against groups with anti-government agendas; however, the data used in this analysis suggests that the majority of governments with tight media controls do not exploit their power in this way. In terms of policy implications, it is suggested here that efforts to increase the level of education attainment and economic development as well as improve the communication between different ethno-linguistic groups as well as enhance press freedoms will all have the added benefit of reducing conflict. 108 Journal of Economic and Social Studies �Conflict and the Freedom of the Press It should also be noted that the results are limited to the data measures used in this analysis. While the data measures such as FP and PCI are widely used and respected, all such quantitative measures of qualitative issues cannot be expected to capture these factors perfectly and at least some measurement error will occur in all such studies. Thus, the results presented here need to be reviewed and considered in this light. Finally, as an avenue for future research, one should consider the role that social media plays in either inciting or mitigating conflict. 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Review of Economics and Statistics, 82, 1-11. 112 Journal of Economic and Social Studies � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2398 Title A name given to the resource Conflict and the Freedom of the Press Author Author Das, Jayoti DiRienzo, Cassandra E. Abstract A summary of the resource. Using data from 146 countries, this study empirically tests the relationship between conflict and press freedom. Holding all else constant, the results indicate that the relationship between conflict and press freedom is best described as nonlinear such that the greatest conflict is observed at an intermediate level of press freedom. It is theorized that while past research has found that greater press freedom serves to reduce conflict, governments with a tightly controlled press can also observe lower levels of conflict as these government can use their control to censored information, images, and messaging to minimize conflict and unrest. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-03-15 Keywords Keywords. Article PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/fab64b180b2aa891a6ec87263bbe5f16.pdf 44da1e8eac0421263ee15c11c1f9c971 PDF Text Text Journal of Economic and Social Studies Determinations of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovinai Selma Delalić Centre for Economic Development and Research Sarajevo, Bosnia-Herzegovina delalic@cedar.ba Nermin Oručii International University of Sarajevo Sarajevo, Bosnia-Herzegovina oruc@cedar.ba Abstract: Rural development is identified as one of the key areas of intervention in Bosnia and Herzegovina (BiH). The main drivers of rural development can be small sized companies run by rural entrepreneurs, and intervention should be focused on enabling environment for their growth. The paper presents analysis of the factors determining growth in employment by small rural businesses in BiH, using quantitative data from original survey conducted in 2012. The direction and magnitude of different factors were further analyzed through qualitative data analysis. Findings from this research identify the key obstacles affecting growth of rural businesses, primarily related to infrastructure, access to finance, access to market, and availability of “soft” skills. The paper proposed possible ways of intervention in reducing these obstacles in order to promote rural development in BiH. Keywords: Rural Entrepreneurship, Firm Growth, Development, Regression JEL Classification: Q12, D92, L25 Article History Submitted: 06 Jun 2013 Resubmitted: 27 August 2013 Accepted: 16 September 2013 5 �Selma Delalić, Nermin Oruč Introduction BiH as a developing and transition country faces severe obstacles in economic development, especially in rural areas, where majority (above 60%) of the population is located (Ministry of Foreign Trade and Entrepreneurship, 2008). Without proper and sustainable rural entrepreneurship development, there are further difficulties for strengthening economic development. This paper investigated the factors that hamper larger involvement of population in rural businesses in the framework of the model of determinants of growth of firms in rural areas. The focus is on micro and small businesses, run by rural entrepreneurs. Entrepreneurship has an important overall role in the economic and rural development, building stronger than ever relations in rural areas. Entrepreneurship, as a dynamic force for growth, employment creation, and life quality improvement (Petrin, 1994), has been considered a key element in rural development and sustainable economic development. The more entrepreneurial region is, the more it outperforms neighbouring economic regions. Acknowledging the central role entrepreneurship has in economic rural development and properly developing conducive entrepreneurship environment (Sherief, 2005), leads to the rural entrepreneurship network that creates a positive business climate and behaviour, decreasing significantly important rural poverty and generates employment, particularly for youth. For the successful and productive environment, it is highly important to understand the factors that influence rural entrepreneurship, which include productive interventions by the state (Petrin, 1994), diversification of products, entrepreneurship promotion and marketing, knowledge transfer and sharing, supply chains and a net of cooperatives and large companies (Rongsen, 1998). Although rural areas in Bosnia and Herzegovina are characterized by small arable parcels per capita, of less than 2 ha of arable land per farm (Volk, 2008), consisting of approximately 250.000 firms, presenting twenty five per cent of the businesses (Volk, 2008), agriculture is very important and persistent way of rural entrepreneurship. Still, large defragmentation and disintegration of small producers, has kept producers mostly related to subsistence agriculture, leading to diminished productivity and inefficiency. This highlights the need to identify the most prominent obstacles to rural entrepreneurship and draft a precise, comprehensive and successful rural entrepreneurship strategy to create sustainable rural development, to generate employment and spur innovation. 6 Journal of Economic and Social Studies �Determination of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina Paper is further organized in five main sections. The next section presents review of the theoretical and empirical literature on factors determining growth of rural businesses. Third section describes the methodology used in the analysis of factors influencing growth of rural businesses in BiH, where the empirical model and data used in the analysis are explained. The fourth section presents results of the empirical estimation of the models. Finally, section five concludes and provides a list of policy recommendations for improving entrepreneurial activities in rural areas as of BiH. Literature Review Growing empirical evidence in the literature on rural entrepreneurship (Volk, 2008), supports the hypothesis that there is a positive correlation between governance, rural entrepreneurship and rural development, where goal oriented policy, transparent support and efficient law framework play an important role. Literature identified the main factors affecting growth of rural businesses. These factors can be broadly divided into “internal” factors (such as characteristics of entrepreneurs, characteristics of the business) and “external” factors (such as population trends, availability of natural resources, government support, characteristics of the labour and good market, quality of the supply chain, and availability of finances). Risk taker, innovator, motivated, opportunity taker, inspired, owner, are all features of the entrepreneur (Martin and Osberg, 2007). Successful entrepreneurs are performing and combining those determinants on the daily basis. Entrepreneurs have a special set of cognitive capacities Schiebold (2011) and attitude (De Mel, Mckenzie and Woodruff, 2010), that makes them unique, as those have direct impact on the success of the business. Cognitive abilities are influenced by the level of education, as more educated are proactive in all areas of the business and in technology development. Norms, values in behavioral contest which are shaped by culture, inevitably have its impact on the entrepreneurship performance (Schiebold, 2011). Personal traits, attitude and strong motivation of entrepreneurs are sufficient (Che Rose, Kumar and Lim, 2006), to overcome impediments for start-up and growth of the entrepreneurship. Although the lack of educated labor force tends to be one of the most influential factors in developed countries such as the United Kingdom, Smallbone et al. (2006) and Goetz and Freshwater (2000) point out on historical data, which show how family background used to be compensated for the lack of knowledge. 7 �Selma Delalić, Nermin Oruč In Nigeria, research by Ajibefun and Daramola (2003) found out that the education level of the owner has highly influenced efficiency of the business and affects the growth of the business. This puts education on the level of high priority variables for technical and organizational effects. Nevertheless, in combination with the age of the owner, education and age have a parabolic shape as two variables, meaning that efficiency of the business performance first rises then declines as owner ages. Although young owners lack experience, they should be given trainings and encouragement to become entrepreneurs. Okurut (2008) stresses out the positive impact of education and business knowledge on the microbusiness performance, while a combination of rural entrepreneurship and female ownership decreases business success. There seems to be a positive link between number of start-up firms and educated owners (Acs and Armington, 2005), not referring solely to secondary degree education. Gianneti and Simonov (2009), assert that substantial entrepreneurial activity is to be influenced by positive entrepreneurial climate in the close regions, giving a special place to social interactions, as one of the main entrepreneurial drivers, that also enhance faster learning through social effect. The usage of many proxies makes this finding challenging in general application and opens a door to new entrepreneurial climate insights. Schields (2005), acknowledges the importance of culture and social factors and family relations, placing higher influence on successful rural entrepreneurship management, linking individuals to rural community development. External opportunities and threats play important role in rural entrepreneur's activity, where entrepreneurs creativity and motivation comes into play, if businesses are planning to survive. Characterized by constant depopulation, rural areas and rural entrepreneurs face a challenge more than ever before, in striving to attract skilled and educated labor, on one hand, and maintain supply of products that should correspond to demand in the market. The logical consequence to this is generally lower firm entry rate in rural areas than in urban areas (Plummer and Headd, 2008, Yu et al., 2008). It is important to note, that successful rural development is highly influenced by institutional support. This does not exclude the possibility of regional development itself, but slows the pace of development in a fast competitive global area and drives down any further motivation and success. Institutional support consists of formal and informal rules. Formal (codes of conduct) are written in the legal framework, directly 8 Journal of Economic and Social Studies �Determination of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina applying (Schiebold, 2011) to the business performance, while informal are shaped in norms, cultural values (Shirley, 2008). Infrastructure plays prominent role in its impact on rural entrepreneurship success, such as road, broadband access and access to water (Walzer, 2009). The more developed infrastructure, the more successful rural entrepreneurs we have (Okurut, 2008). Access to utilities, such as electricity, communication, markets and road, contributed to the growth of the microbusinesses in rural Kenya (Kirubi, 2006). Infrastructure refers to physical and non-physical. Physical infrastructure refers to roads or energy. Non-physical infrastructure consists of market structure. Infrastructure plays an important link of rural entrepreneurs in the urban market. Neglected by institutions in the rural development planning and investment, due to its substantial cost issue, infrastructure is one of the main impediments in transitional countries. Due to the characteristic of rural areas in the sense of their remoteness, additional challenges to rural development are transportation costs (Smallbone, 2006) and infrastructure, affecting entrepreneurship base (Ahmad and Hoffman, 2006). One of the limiting factors is a small local market that influences differently rural entrepreneurship sectors (North and Smallbone, 1996), pushing rural entrepreneurs to export markets from its very first establishment (Smallbone et al, 1993, Dabson 2011). This clearly provides insight into the importance of external and institutional support of rural firms. The evidence from the different research sources, indicate the ability of rural firms to overcome the influence of rurality and to adapt to exporting market conditions, more successfully than their urban counterparts (Gale, 1998). The pace of this adoption is facilitated by the level of the country's development and opens a door to export markets, institutional and policy support (Wyer and Smallbone, 1999) in developing and post transitional countries. Short supply chain as a constraining factor, has been recognized by France, in the new strategy for rural entrepreneurship development and is highly welcomed by Member States and drafted in New EU Rural Development Policy 2011 (NRN 2011). Rural businesses are often involved in the chain with the middlemen (Alsos et al, 2011), who by charging its margin, raises the price of the product and in one or another way affects the pace of sales. Shortening the chain, by introducing direct sales to customers, through farm shops, road stands, online sales, fair sales (Alsos et al, 2011) and other forms, reduces costs and allows producers to 9 �Selma Delalić, Nermin Oruč interactively engage in sales. Yet, Verghaegen and Van Hylenbroeck (2001) acknowledge another angle to this issue, stressing out that direct sale to producers, require marketing and sales skills as a prerequisite and may take valuable time. As this might be true, for remote rural enterprises, we believe that short supply chain has possibility to contribute in general through various ways. To some extent, the external factors are more interlinked with lacking and skillful labor force (Petrin, 1994), whose decreasing motivation to rural employment is compensated with a growing propensity to urban market opportunities. This leads to faster ageing of the rural population that influences the possibility of dynamic rural enterprise growth. Even Dabson (2001), points out on the significance of population in the rural area, that creates demand for rural products, without which rural products cannot decrease overhead costs, due to large production. BiH agriculture is still behind regional countries Croatia, Serbia and Macedonia, on the competitiveness scale (Zekić et al, 2009), due to low productivity level, crop yields, inefficient and obsolete production techniques and broken links between production and supply chains. Volk (2008) asserts that agricultural enterprises in Bosnia and Herzegovina, face serious obstacles to their development and production, where the most cited are related to obsolete technological processes, subsistence farming, poor irrigation techniques, deficient capitalization level, marginal production innovation, dependence on the inputs and natural production. BiH agricultural demand dominates the domestic agrosupply, despite Bosnian natural and climate advantages and leads to large agro-import. Methodology Model Extending the model developed by Headd (2000) by business characteristics of rural entrepreneurship, and combining it with the recent research findings as presented in the literature review, we developed the following baseline model specification: yi  0   j  OCij   k  BCik  l  CSFil  ui (1) This specification is estimated by three models, with alternative specification of the dependent variable. In the first model, it is expresses 10 Journal of Economic and Social Studies �Determination of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina as average annual change in number of employees (aace). In the second, it is average annual growth in number of employees (aage), while in the third model it is expressed as a dummy variable taking value of 1 if number of employees increased (successdv). Due to such specifications of the dependent variable, the first two models were estimated by OLS method, while probit was used for the third one (with a dummy variable). The choice of employment increase is based on recent empirical studies on determinants of growth of firms, where employment was found as more appropriate than sales data, which are commonly underreported in surveys. Additional motivation for the choice of employment data is that they are more informative, as employment generation should be the most important objective of rural development activities in BiH, rather than growth of output. The main independent variablesiii are factors determining growth of rural businesses, a presented in Equation (1) are: OC – list of demographic characteristics of the owner, such as age, sex, education level, migration experience, BC – characteristics of the business (age of business, whether it was established by current owner of inherited, export orientation, etc.), including industry (5 types of businesses) and region dummies (3 regions) CSF – a list of 21 critical success factors (obstacles), expressed as dummy variables indicating that interviewed owner answered that she/he is, in running the business, facing these obstacles frequently. The list of critical success factors was prepared base on previous qualitative research, conducted by authors for the World Bank in 2012. In order to reach the best possible specification of the reduced model, we decided not to rely only on test-statistics from the hypothesis testing of statistical significance of coefficients from the estimated model for selection of the success factors, but also to identify the most influential factors by using descriptive statistics resultsiv. Then, the list of the most important factors was included into the model, and it was further reduced by excluding some of the insignificant variables related to owner's or business characteristics. Female owners are found to be in minority and face various obstacles due to gender issue, especially in complying with financial requirements (Papadaki and Chami, 2002) by financial institutions, although it has no implications to firm survival rate (Cooper et al, 1994). Age of the 11 �Selma Delalić, Nermin Oruč entrepreneur is shown to be positively related to some extend and as owner ages, it becomes less dynamic affecting the business performance (Selaman et al., 2011). Family business presents a healthy ground for young entrepreneurs, who are in a position to learn from their family on rural entrepreneurship from the very beginning, to learn about processes and resources (Walzer, 2009). Although in advanced position, empirical evidence shows that businesses started from owners' own interest (not inherited) are more successful in the long term (Walzer, 2009). High growing entrepreneurships are negatively related to family businesses (Bjuggren et al., 2010). Beneth and Smith (2002), emphasize how the remoteness of rural areas contributes to decreasing tendency of access to trainings and knowledge transfer, associated with larger costs of services, inadequate training support, and obsolete knowledge. The more distant enterprises have a transportation cost as a significant part of the price calculation and it directly reduces its margins and profit (Walzer, 2009). Geographic location (Bosworth, 2011) is unprecedently defining the type of products harvested or services provided in the rural area of one country. The comparative advantage for the purpose of efficient production is important, but the geography provides no crucial obstacle to rural firms. Financing is ever growing obstacle, very sensitive in the aspect of rural entrepreneurship in the context of credit collateral and credit history. It is extended to difficulties in loan procedures and documentation (Nurbani et al., 2010). Confessing the fact that start-up in general have financial issues, as is supported by the research of Nurbaini et al. (2010), even providing the access to various financial schemes does not guarantee success. Data and Descriptive Statistics Since there are no available data for the purpose of analysis presented in this paper, a survey among 300 entrepreneurs in BiH was conducted. The sampling frame used for sample selection consists of various sources, of over 1.300 entities, as there is no single database of rural entrepreneurship existing in Bosnia and Herzegovina. From the database we have selected 300 rural businesses for our sample. Response rate was 70 percent, so we have ended up with 210 respondents. For selection of rural entrepreneurs, we applied settlement based definition of rurality, where rural businesses are the ones operating in villages. 12 Journal of Economic and Social Studies �Determination of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina The predominant form of rural businesses is micro and small business, where they account for 90 percent of all rural establishments (Buss and Yancer, 1999) and nearly two-thirds of all rural jobs, making them a vital part of the rural economy (McDaniel, 2001). Almost 75 percent of rural small businesses have fewer than 20 employees, accounting for a quarter of rural jobs, but only a fifth of rural payrolls (McDaniel, 2001). Therefore, we decided to focus on micro and small (0-49 employees) businesses in our research. The sampling selection procedure applied here was two stage stratification. First stage stratification was stratification of businesses according to their type. All businesses were grouped into five large groups (fruits, vegetables, rural tourism, rural retail, other businesses) and the number of businesses from each of these strata were selected into the sample according to their share in the sampling frame. In the second stage, we divided entire BiH into three regions, characterized by diverse characteristics of rural businesses present there. The regions are Northern Bosnia, Central Bosnia, and Herzegovina (southern part of the country). From each area, number of businesses selected into the sample was according to the proportion of the businesses in each type of business (first stage strata) from each region based on their share in the sampling frame. This way, we assured coverage of all types of businesses and representativeness of businesses predominantly located in a particular region, since it is expected that different types of businesses in different regions face obstacles (e.g. transportation) at a different extent. Descriptive analysis of data reveals some interesting findings, informative for the further econometric analysis. Entrepreneurs are mostly men (in 86.95% of cases), 47.8 years old on average, have a secondary education level (in 57.76% of cases), with 19 years of total experience and 12 years of experience in the sector of their business. Businesses are mostly established (82,43% cases) from the owner's interest and only a few are inherited (11.2%) from the family, and are using the owner's asset (in 87.14% of cases). Successful rural businesses have written contracts (60%) with one or two crucial customers (68%). Rural businesses are mainly established by one owner, using owner's savings and in a few cases, by using a combination of bank credit and owner savings. It employs 9 employees currently, have a 10% in growth employment, and a 4.5% growth in sales annually, on average, with a large standard deviation. It has written contracts (in 59.52% of cases) and sells to 2 different groups of customers. The rate of the rural business progress can be seen in a positive change in 13 �Selma Delalić, Nermin Oruč the number of employees. Rural businesses in BiH on average employ one worker for every two years of a business existence. Ninety two percent of businesses are growing but the rate of its progress is very slow, particularly including average age of the business. Rural businesses are 7 km away from the closest bank or microcredit affiliates and 5 km away from the road. Supply of water, electricity, internet and access to the road are supplied in the 97% of cases on average, with no impediments. Rural businesses mostly have signed contracts and we have a situation where a group of business who signed no contract, in 48.57% of cases had no success, and businesses that signed a contract, by 22.11% faced the same situation. What makes those two groups distinct, is an uneven distribution of success. Micro businesses are burdened with the costs of transportation (51.41%). More than 68% of rural businesses which answered that their business faces complicated administrative procedures are micro businesses (employing 1 up to 10 employees), who are successful, employing 2 to 5 additional workers. Out of those, 43% are those faced with this obstacle the most and have zero employment growth, meaning zero success. Real interest rate as an obstacle, has an impact on micro businesses („the slow growers“) in 62.4%, affecting businesses that employ 1 to 5 employees the most. What is interesting is the nature of relations among owner's total experience, intention to expand the business and a written business plan. Almost 55% of owners do not have a written business plan. Of those who do have, 15th and 20th year of the business is crucial in planning. Owners express their intention and motivation to expand the business, but plan their activities every 10 years on average. Education of the owner does not particularly affect his/her motivation to write a business plan. Owner of the successful business in 82.24% of cases had the intention to expand the business, and 72.2% of them had a written business plan. Only those established by the pure interest of the owner (77.14%) using owners' savings as a starting capital (63.7%) is the most successful (77.14%). Results The results of regression analysis of three alternative specifications of the reduced model from Equation (1), with different dependent variable, are presented in the table below (t-statistics in parentheses): Table 1. Results of various models 14 Journal of Economic and Social Studies �Determination of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina Variables Model 1 OLS Dependent Average annual change in employees Age of owner If owner resides in rural areas Owner has tertiary education Business was inherited Business was started by using own savings Owner receives remittances Exports Taxes and contributions Lack of support by local authorities High costs of transport Exchange rate volatility Large competitors Difficult to obtain loan Constant Observations R-squared -0.012 (-0.92) -0.455* (-1.83) 0.331 (-1.43) 0.586 (-1.51) 0.691* (2.42) 0.463* (-1.77) 0.901** (3.16) -0.36 (-1.01) -0.699* (2.45) -0.784** (2.32) -0.325 (-1.26) 0.262 (-1.06) 0.717** (2.37) 1.202 (-1.67) 135 0.25 Model 2 OLS Average annual growth in employees (%) -1.223 (-0.94) -44.64* (-1.76) 33.876 (-1.43) 58.858 (-1.5) 69.649* (2.38) 46.973* (-1.76) 90.491** (3.13) -36.583 (-1.01) -69.314** (2.35) -78.964** (2.30) -31.567 (-1.19) 27.125 (-1.06) 70.756** (2.23) 120.627 (-1.65) 132 0.25 Model 3 Probit = 1 if number of employees increased 0.006 (-0.40) -0.304 (-1.14) 0.326 (-1.26) 1.344** (2.33) 0.414 (-1.38) 0.713** (2.09) 0.015 -0.05 0.779* (2.32) -0.967** (2.68) -0.033 (-0.1) -0.258 (-0.83) 0.294 (-1.09) 0.908** (2.93) -0.679 (-0.91) 166 Source: Calculation done by authors ** statistically significant at 1% level, * statistically significant at 5% level The results presented in the table above show that the most important factors affecting growth of a rural firm in BiH are lack of support by lower 15 �Selma Delalić, Nermin Oruč levels governments (institutional factor), high transportation costs (infrastructural factor), and difficulties in obtaining a loan (access to finance factor). Some other success factors, such as presence of large competitors, large taxes and contributions, or exchange rate volatility, appeared as statistically significant factors in one of the three models, but the significance was not consistent across the models. In addition, significant variables affecting growth of rural businesses are, according to the estimation results from Table 1, export orientation of a business, if business was established by using own savings, if owner has tertiary education, and if owner receives remittances from abroad. The models were tested for standard OLS assumptions and no significant problems were identified. It was assumed that the high level of multicolinearity could be expected; however, the results of the correlation and variance inflation factor analysis did not suggest significant degree of colinearity between these variablesv. Possible endogeneity of the set of variables for critical success factors was identified. Less successful entrepreneurs could be more likely to report more significant obstacles. However, appropriate instruments were not available in the dataset, and it can be assumed that any possible endogeneity problem, arising from the correlation between these variables and the error term, was reduced by inclusion of a set of demographic characteristics of the owner. Exclusion of these variables would increase the endogeneity bias. Conclusions The results of the rural entrepreneurship survey reveal that the main factors affecting success of rural enterprises in Bosnia and Herzegovina are related to financial, institutional and infrastructural constraints. The model has shown almost each factor to have a similar level of impact on the rural success, which means we need to work on those factors simultaneously, without prioritizing one over another. Institutional factors, primarily related to the business climate, severely affect growth of rural businesses, as any other. BiH is well known as a country which has lowest rating with regards to business climate in Europe, and is among the worst in the world. Average number of days for starting a new business, according to the World Bank’s Doing Business reports, is more than 70 days. The government needs to start implementing necessary reforms of administrative procedures, improve functioning of their services to businesses, including better targeting and 16 Journal of Economic and Social Studies �Determination of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina coverage of subsidies, and to make other improvements of business climate (e.g. reducing tax burdens to businesses). These reforms, as we saw from the results presented, will help rural entrepreneurs to grow faster, but would also increase entrepreneurial activities by other people in BiH as well as attract more foreign investments. All these would result in increase of employment, which is highest in Europe and should be one of the goals at the top of the agenda of the BiH government. The results also show that rural entrepreneurs expect more support from local than state level government. This should be taken into account in evaluation of the results of government at different level, as well as for design of strategies for rural development and related activities. Support by the local government is particularly expected in the activities related to improvement of local infrastructure, such a local roads, access to water, and access to phone and internet. Successful businesses have a need for a source of finance, on a regular basis, especially when it comes to buying new machines and facilities or refurbishing old ones, and investing in new skills. In addition, easier access to start-up funds for new entrepreneurs would have positive influence on boosting entrepreneurial activities in rural areas. Such a support by the government would be directly transformed into the employment growth. Finally, besides the results provided above, additional research of rural entrepreneurship is necessary for better understanding of this issue, which is of extreme importance for BiH. Since data availability is the first condition for a proper research, a census of rural businesses and establishment of comprehensive database of such businesses is the first step in this direction. Establishment of the database is also one of the key EU requirements for BiH in order to be eligible for funds available for rural development in BiH (IPARD). 17 �Selma Delalić, Nermin Oruč References Acs, Zoltan J. & Catherine Armington (2005). Using Census BITS to Explore Entrepreneurship, Geography, and Economic Growth. Small Business Research Summary No. 248, U.S. Small Business Administration, Office of Advocacy. Ahmad, N. & A. Hoffman (2006). A Framework for Addressing and Measuring Entrepreneurship.OECD. 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Description of the variables Variable Description Survey Question Owner’s characteristics O_male O_age O_birth O_resr O_prim O_sec O_tert O_exp-tot O_exp-s O_duration_migr =1 if owner is male Owner’s age in years =1 if owner born in rural area =1 if owner lives in rural area =1 if owner has primary education =1 if owner has secondary education =1 if owner has tertiary education Years of total experience of the owner Years of experience in that sector of the owner Years spent abroad A1 A2 A3 A4 A5 A5 A5 A6a Age of business =1 if business is in fruits sector =1 if business is in Vegetables sector =1 if business is in Tourism sector =1 if business is in retail sector =1 if business is in other sectors =1 if business located in northern region =1 if business located in southern region Number of o wners 1=firm has long-term contract with customer Number of employees now Number of employees at start-up =1 if business inherited =1 if business established by owner -1 if own assets used in business Dummy variable, 1= savings, 0=other =1 if receives remittances Dummy variable, 1=if firm exports, 0=No B1 B3 B3 B3 B3 B3 A6c A7 Business characteristics B_age fruits Vegetables Tourism retail other north south owners contract Empl1 Empl2 inherited established assets saving rem export B2 B16 B3a B3b B5b B5a B8 B11 B12 B17 21 �Selma Delalić, Nermin Oruč coop 1=member of a cooperative B19 Obstacles Ci_1 Ci_2 Ci_3 Ci_4 Ci_5 Ci_6 Cii_7 Cii_8 Cii_9 Cii_10 Variable Ciii_11 Ciii_12 Ci_13 Civ_14 Civ_15 Civ_16 Civ_17 22 =1 if facing obstacle 1, “Complicated procedures for obtaining subsidies”, frequently =1 if facing obstacle 2, “Lack of support by the government”, frequently =1 if facing obstacle 3, “High taxes and contributions”, frequently =1 if facing obstacle 4, “Lack of local community support”, frequently =1 if facing obstacle 5, “Difficulties in obtaining standards, certificates, etc.”, frequently =1 if facing obstacle 6, “Other institutional”, frequently =1 if facing obstacle 7, “High transportation costs”, frequently =1 if facing obstacle 8, “No access to water”, frequently =1 if facing obstacle 9, “No access to phone, internet, etc.”, frequently =1 if facing obstacle 10, “Other infrastructural”, frequently Desciption =1 if facing obstacle 11, “Lack of trained labour force”, frequently =1 if facing obstacle 12, “Other skill related”, frequently =1 if facing obstacle 13, “Difficulties in selling the products”, frequently =1 if facing obstacle 14, “Low price of products offered by resellers”, frequently =1 if facing obstacle 15, “Too volatile exchange rates”, frequently =1 if facing obstacle 16, “High degree of competition”, frequently =1 if facing obstacle 17, “Expensive C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 Survey Question C11 C12 C13 C14 C15 C16 C17 Journal of Economic and Social Studies �Determination of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina Civ_18 Civ_19 Cv_20 Cv_21 Cv_22 raw materials”, frequently =1 if facing obstacle 18, “Remote from the larger groceries or discount center”, frequently =1 if facing obstacle 19, “Other market related”, frequently =1 if facing obstacle 20, “High interest rates”, frequently =1 if facing obstacle 21, “Difficulties in obtaining a loan”, frequently =1 if facing obstacle 21, “Other finance related”, frequently C18 C19 C20 C21 C22 Stratification variables type region Categorical variable for type of business (=1 fruits, =2, vegetables, =3 retail, =4 tourism, =5 other types; for Albania first 4 for four types with largest share, 5 for the rest) Categorical variable for region (=1 centre, =2 north, =3 south) B3 iThis paper was prepared in the framework of the Regional Research Promotion Programme in the Western Balkans (RRPP), which is run by the University of Fribourg upon a mandate of the Swiss Agency for Development and Cooperation, SDC, Federal Department of Foreign Affairs. The views expressed in this paper are those of the authors and do not necessarily represent opinions of the SDC and the University of Fribourg. iiCareer Integration Fellow of the CERG-EI, Prague iiiDetailed description of each variable included in estimation is provided in Appendix 1. iv Here, we used Pearson's χ2 statistics. vAll correlations were below 0.5 and all VIF factors were below 10, while the average VIF was below 4. 23 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2393 Title A name given to the resource Determinations of Firm Growth: A Study of Rural SMEs in Bosnia-Herzegovina Author Author DELALIĆ, Selma ORUČ, Nermin Abstract A summary of the resource. Rural development is identified as one of the key areas of intervention in Bosnia and Herzegovina (BiH). The main drivers of rural development can be small sized companies run by rural entrepreneurs, and intervention should be focused on enabling environment for their growth. The paper presents analysis of the factors determining growth in employment by small rural businesses in BiH, using quantitative data from original survey conducted in 2012. The direction and magnitude of different factors were further analyzed through qualitative data analysis. Findings from this research identify the key obstacles affecting growth of rural businesses, primarily related to infrastructure, access to finance, access to market, and availability of “soft” skills. The paper proposed possible ways of intervention in reducing these obstacles in order to promote rural development in BiH. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-03-15 Keywords Keywords. Article PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/0771c481f09b920dcf081288710e8cd6.pdf 96be6eb4d0b9765aaa11513cbeeab82e PDF Text Text Journal of Economic and Social Studies Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey Ahmet Baytok Faculty of Tourism Afyon Kocatepe University, Turkey ahmetbaytok@aku.edu.tr Hasan Hüseyin Soybali Faculty of Tourism Afyon Kocatepe University, Turkey hsoybali@aku.edu.tr Ozcan Zorlu Faculty of Tourism, Afyon Kocatepe University, Turkey ozcanzorlu@aku.edu.tr Abstract: This study aims to analyze knowledge management (KM) processes in thermal hotels in Afyonkarahisar province in Turkey. Within the scope of this research, the KM processes applied in thermal hotels have been determined through conducting questionnaire surveys. Descriptive analyses of hotel managers’ views on KM processes were presented. Also, discriminant analysis was used to determine differences between participants’ views based on their demographic characteristics. As a result of the study, it was found that thermal hotels highly apply KM processes. Knowledge creation is the most applied KM process among others. In Introduction addition, it was found that informal communication should be encouraged in order to improve knowledge sharing. Keywords: Knowledge Management, Thermal Hotels, Afyonkarahisar. JEL Classification: M15, L83. D83, Article History Submitted: 06 Jun 2013 Resubmitted: 25 September 2013 Accepted: 22 October 2013 159 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu Knowledge is the main determinant of transforming business techniques and technologies into a competitive tool. Since competitors cannot benchmark or copy possessed unique knowledge, this fact makes the knowledge significant (Tiwana, 2003: 72). Thus, knowledge and knowledge management (KM) is one of the most important asset in business, and one of the most researched subjects in academic literature. KM is seen as an essential and important tool for companies in sustaining their existence and gaining competitive advantage (Martensson, 2000: 204; Schönström, 2005: 17; Sandhawalia and Dalcher, 2010: 313, Stapleton, 2003: 97) has been firstly coined by Dr. Karl Wiig in academic literature. It is described by American Productivity and Quality Center (APQC) as a systematic approach (integrating people, processes, technology, and content) to enable information and knowledge to be created and flow to the right people at the right time so that their work and decisions can add value to the mission of the organization (Leawitt, 2003). KM has also engendered many new concepts and categories in using knowledge to create value (Dalkir, 2005: xiii). Nowadays, all companies gather information by interacting with their business environment; transform this information to the knowledge and run using this knowledge consonantly with their know-how, values, beliefs and internal rules (Davenport and Prusak, 2000: 52). This process, which is also named as KM processes naturally exists in organization (Shi, 2010: 12), expresses a structured coordination to effective management of knowledge (Gold, Malhotra, Segars, 2001:187) and is mainly related to how knowledge is created and used in organization (Nonaka and Takeuchi, 1995: 59). When the KM literature is reviewed, it is seen that KM processes have been categorized differently by many researchers (Alavi and Leidner, 1999; Liebowitz, 2001; Bouncken, 2002; Bryant, 2003; Holsapple, Jones and Singh, 2007; Fink and Ploder, 2011). As these categorizations are considered, KM processes can be classified as knowledge acquisition, knowledge creation, knowledge sharing, knowledge storage and documentation, knowledge use. These processes will be explained in detail in next section. Contrary to its popularity in business management literature, it is seen that the number of studies on KM processes in hospitality industry is very limited. Thus, KM is a relatively new concept for hospitality management literature and much more detailed studies need to be conducted in order to understand the KM and KM processes in hospitality industry. 160 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey In this context, this study aims to draw attention to KM in hotels by evaluating KM processes in thermal hotels. Within the scope of this research, the KM processes applied in thermal hotels have been determined through conducting questionnaires. Percentage and frequency tables are used to show participants’ demographic characteristics and see participants’ views about KM processes. Finally, discriminant analyses refer differences between participants’ views based on their demographic characteristics. KM Processes in Hospitality Enterprises Tourism as a knowledge intensive industry consists of complex and dynamic network structures (Baggio, 2006). Intangible, inseparable, perishable and heterogeneous characteristics of tourism product and its compound nature make knowledge important for tourism industry. Acquiring knowledge instantly and using it in production, consumption and operational activities are rarely important in other sectors as much as tourism industry (Poon, 1993). Knowledge plays vital role in tourism industry and industry cannot fulfill its functions completely without knowledge (O’Connor, 1999). Increasing and diversifying needs and expectations of tourism demand, increased competition and efficient use of resources make knowledge important in tourism, and knowledge sharing becomes core of tourism business (Pollack, 1995). Hospitality enterprises are mainly service producers. For the achievement of final products, hospitality companies collaborate with a variety of service industries like travel agencies, tour operators, transporters, entertainment, shopping. Thus hospitality industry have knowledge-based or knowledge intensive service processes (Kahle, 2002). Moreover, the industry is knowledge-intensive as a result of the nature of service product, where the service delivery occurs as a result of interaction between customers and employees, and where it is required that employees are acknowledged about customers’ needs in order to achieve customer satisfaction (Kahle, 2002; Kotler, Bowen and Makens, 1999; cited by Hallin and Marnburg, 2007:3). In addition, knowledge management is important for hotel chains which have to deliver an overall quality standard in geographically distributed hotels (Medlik, 1990: 153; cited by Bouncken, 2002: 27). Possible application areas of knowledge management systems in hospitality and tourism are business planning (process of planning capacities, quality standards and prices of additional services), service operations (hotel facilities planning, event scheduling) quality 161 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu improvement (e.g. managing customer complaints) and reaction on emerging cases (Gronau, 2002). And, possible knowledge sources can be contents of files on a server, intranet pages, directory of business relevant persons, e-mail traffic that is guided to specialists for certain situations (e.g. for technical maintenance (Gronau, 2002). Bounken (2002: 30) classifies this knowledge stated in sources as task- specific, task-related, transactive memory and guest–related knowledge for hotels. Hoteliers should always seek, use and value knowledge like professionals in other business sectors. Thus knowledge existing in hospitality enterprises should be managed in the scope of strategic manner with certain processes. Cooper (2006) classifies knowledge management processes in hotels as knowledge stocks and mapping, knowledge capturing, knowledge codifying, knowledge flow and knowledge transfer. And, Bouncken (2002) classifies those processes as knowledge identification, acquisition and development of knowledge, knowledge accumulation, retrieval and distribution, and knowledge controlling. On the other hand we classify KM processes, in accordance with general KM literature, as acquisition, creation, sharing, storage and documentation, and utilization of knowledge as mentioned earlier. Knowledge Acquisition: Companies firstly try to identify knowledge that exists outside and inside of organization but cannot be detected/found, in the context of knowledge acquisition (Shi, 2010: 12; Isa, Abdullah, Hamzah, ArsHad, 2008: 105, Bratianu, 2011: 6, Al-Busaidi, 2011: 402, Sun, 2010: 508). In this stage, the required knowledge generally has information characteristics. Companies capture required information in two ways, from inside and outside of the organization (Wiig, 1999: 2). First, they capture knowledge existing in the organization by knowledge workers. Second, they outsource or purchase required information existing outside of the organization (Bergeron, 2003: 95). Companies capture required information by means of their customers, suppliers, competitors, relation with strategic alliances (Fink and Ploder, 2011: 52), books, software, academic publications, research reports and video conferences (Bratianu, 2011: 6). Besides companies utilize structured interviews, talk loud analysis, protocols, questionnaires, observations and simulations to capture the required information (Dalkir, 2005: 81). Bouncken (2002) states that in hospitality enterprises knowledge acquisition concentrates on external knowledge retrieval from customers, external experts, tourist offices and often enhances the assimilation of previously unnoticed information. The author also emphasizes that knowledge develops (captures) via service research, service practice and distribution and cooperation of knowledge among employees in hotels. 162 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey Knowledge Creation: Knowledge creation is getting new and useful knowledge from the information that is captured from the sources existing inside and outside of the organization. Nonaka and Takeuchi (1995: 5973) describe knowledge creation as a process of socialization, externalization, combination and internalization. According to researchers, implicit/tacit knowledge creation is a spiral process starting at the individual level and moving up through expanding communities of interaction that crosses sectional, departmental, divisional and organizational boundaries (Nonaka and Takeuchi, 1995: 72). On the other hand, knowledge which is created in the organization should be shared before and after knowledge creation processes in order to use it efficiently at an individual and organizational level. Knowledge Sharing: Knowledge sharing can be described as transferring or disseminating of knowledge from a worker, group or organization to another (Lee, 2001: 324). Also, it can be described as interaction between explicit and implicit knowledge (Lee, Gillespie, Mann and Wearing: 2010: 474). In a broader perspective, knowledge sharing is composed of the activities that involve gathering, absorbing, and/or transferring product and/or service information between organizations and customers, alliance partners, and/or employees (Chen and Barnes, 2006). To provide effective knowledge sharing in organizations; motivation and encouragement systems and an open organizational structure should be designed to support knowledge flow, technological support should be provided such as intranet and internet (Cook and Cook, 2004: 314; Riege, 2005: 29). Physical areas that enable informal communication such as talking rooms, water cooler/teapot and cafeteria areas should be designed and finally some activities that enable face to face communication should be organized such as meetings (Davenport and Prusak, 2000: 89-95). Contrary to this fact, high personnel turnover and rotating staff limit the knowledge sharing in hotels. Thus, hotels’ management should concentrate on transforming tacit knowledge to explicit knowledge. Knowledge Storage and Documentation: This process basically aims to make organizational knowledge accessible for everyone. Knowledge storage and documentation process identifies which knowledge will be stored in the organization (Hattendorf, 2002: 65), and includes codification and storing of knowledge captured from organization members and external sources (Alavi and Leidner, 1999). Knowledge Utilization: This process basically consists of carrying out activities to ensure that the knowledge is applied productively for its benefits (Fink and Ploder, 2011: 52). Organizational knowledge utilization 163 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu can be categorized as knowledge use at micro and macro level. Management of knowledge in micro level is prior and essential in organizational knowledge utilization to increase organizational performance and profitability. On the other hand, it is intended to use explicit knowledge disclosed by the organization to its environment as a part of marketing strategy or as a survival tool in a competitive market (Reychav and Weisberg, 2006: 225). In knowledge utilization processes, companies gain competitive advantage and create value by combining knowledge with products and services, applying it within new projects (Kasvi, Vartiainen and Hailikari, 2003: 572), and using this knowledge in decision making, policy making, problem solving and developing new products to meet human/enterprise needs (Salo, 2009; Al-Busaidi, 2011: 403). Knowledge Management in Thermal Hotels and Afyonkarahisar as a Thermal Tourism Destination Utilization of thermal water resources for health purposes is one of the oldest travel motivations dating back to ancient Egypt, Greek and Roman periods (Özer, 1991). Today, the effort for the utilization of natural thermal resources with support of the modern medicine, has caused the emergence of thermal tourism which is defined as a type of tourism which consists of various types of utilization methods such as "thermo-mineral water bath, drinking, inhalation, mud bath, cure (treatment) applications which combine supporting treatment methods as the climatic cure, physical therapy, rehabilitation, exercise, psychotherapy and diet as well as the use of thermal waters for entertainment and recreational purposes (Kültürve Turizm Bakanlığı, 2013). The realization of thermal tourism activities in an area is only possible with the existence of thermal facilities which includes spas where “mud, under-ground, sea and climate related natural healing elements are used as treatment instruments, drinking cure centres and climatic cure centres and recreational and treatment units in these locations (ResmiGazete, 2005). The necessity to meet the treatment and recreational demands together in thermal tourism, distinguishes management and organizational structure of thermal tourism enterprises from others (Özbek, 1991). Service delivery in the same place for healthy and patient guests in thermal enterprises, having cure units in their organizational structure, application of different programs (physical therapy, rehabilitation, diet etc.) to patients within the scope of cure applications and need for certain period of time (21 days in average) for the completion of curing practises (Arasıl, 1991) and necessity to enrich recreational areas require these enterprises to operate in a 164 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey complex structure and system (Özbek, 1991). This structure makes the knowledge important in thermal hotel enterprises to be able to manage the activities efficiently and effectively. Thermal hotels are the enterprises which produce hospitality services same as other accommodation enterprises. Therefore, the acquisition, creation, sharing, storage, and utilization of knowledge in all areas falling within the scope hospitality enterprises’ operations also apply to thermal hotel enterprises. For example, collection of knowledge from health institutions in target markets on frequently observed common diseases and health problems which can be treated by thermal treatment in those areas or obtaining knowledge related to competitors and their operations refers to the acquisition of knowledge management processes. The use of that knowledge for the planning and execution of their activities and development of new treatment methods and services is knowledge creation. The delivery of knowledge about meals arranged by the specialist doctor in the cure centre to the kitchen for preparation and food and beverage departments for its service can be given an example to knowledge flow and share. The storage of knowledge related to treatment practices to use it on the patients who indicate the similar health problems in future in databases/warehouses, and keeping information on weekly, monthly and annual occupancy rates in the front office is knowledge storage / documentation process. The use of acquired, created, shared and stored knowledge in a thermal hotel for the determination of future management strategies can be expressed as an example of the knowledge use. Afyonkarahisar, an Aegean Province, is located in Phrygian Region which is planned to be developed as thermal tourism destination together with Ankara, Eskisehir, Kütahya and Uşak provinces in the Turkey’s tourism strategy for 2023 (Kültürve Turizm Bakanlığı, 2013a). The basic attraction of the province, in terms of tourism is the natural thermal water resources located in its four regions; Ömer-Gecek (Centre), Hüdai (Sandıklı), Heybeli (Bolvadin) and Gazlıgöl (İhsaniye). All of these four thermal tourism regions of Afyonkarahisar have been announced as Thermal Tourism Region by the Ministry of Culture and Tourism. According to the 2012 statistics of Ministry of Culture and Tourism, 14 Ministry registered operation licensed hospitality enterprises operate in Afyonkarahisar. The bed capacity is 4,925 in these enterprises. There are also 15 Ministry registered investment licensed hospitality enterprises with a 9,100 bed capacity. The hospitality supra-structure of Afyonkarahisar is largely formed by the hospitality enterprises established for thermal tourism purposes. The most quality enterprises are especially located in Ömer165 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu Gecek in city centre and Sandıklı- Hüdai (The most quality enterprises are especially located in Ömer-Gecek in city centre and Sandıklı- Hüdai regions). There are 5 five-star hospitality enterprises with a 3,204 bed capacity in Ömer-Gecek thermal tourism region. 1,140 beds are available in Sandkl-Hüdai in two five-star hospitality enterprises. The share of these two regions in total Ministry registered bed capacity reaches to as high as 88%. While mostly a condominium supra-structure is observed in Gazlıgöl (While mostly a condominium supra-structure is observed in Gazlıgöl thermal tourism region), Heybeli thermal tourism region has small thermal enterprises which are operated by Bolvadin District Municipality. According to 2012 statistics of Ministry of Culture and Tourism, a total of 264,841 visitors of whom 7,720 are foreign and 257,121 are Turkish citizens were accommodated in Afyonkarahisar ( Afyonkarahisar İl KültürveTurizm Müdürlüğü, 2013). Methodology In this descriptive study, it is primarily aimed to determine whether thermal hotels use KM and if it is to what degree they use KM processes in the scope of strategic management. Other basic objective of the study is to assign, on the condition that KM processes in thermal hotels differentiate according to some demographic variables of middle and senior hotel managers. It is also assumed that results of the survey will contribute to the related literature and hotel managers or owners who want to practice KM in his/her hotel in the context of strategic management to gain competitive advantage especially in the long term. A quantitative research method was preferred to collect required data in this study. Thus, questionnaire method which is mostly preferred of quantitative research method was used. The questionnaire basically consists of two main sections. Some close-ended questions such as gender, age, department, and years of working experience in the hotel were asked to hotel managers in the first section. A 5-point Likert Scale consisting of 32 items about KM processes took part in the second section of the questionnaire. With these items, it is aimed to gather required data related to acquisition, creation, sharing, storage and documentation, and utilization of knowledge. KM process statements were adapted from Shi’s (2010) PhD dissertation on KM. The questionnaire was conducted starting from 10 February 2013 to 25 March 2013 in seven 5 star hotels located in Afyonkarahisar. A total of 67middle and senior managers were asked to complete the questionnaire 166 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey form vis-à-vis. PASW 18 statistical package programme was used to analyze the gathered data. Data Analyses For the purpose of the study, reliability analyses were performed in order to detect the validity of questionnaire data for the descriptive and discriminant analyses at beginning of the data analyze phase. As shown in Table 1, Cronbach Alpha defining reliability coefficient was found 0.955 for the 32 items of the questionnaire. Furthermore, Cronbach Alpha coefficient was found over 0.70 in each sub-factors of the KM scale. Questionnaire where the Cronbach Alpha coefficient is over 0.70 is often accepted as reliable in social sciences (Lehman et al. 2005). Thus, the data collected via questionnaire in this study was accepted reliable for the descriptive and discriminant analyses. Table 1. Reliability Test Results KM scale (32 items) KM scale sub-factors a) Knowledge acquisition b) Knowledge creation c) Knowledge sharing d) Knowledge storage and documentation e) Knowledge utilization Cronbach Alpha 0.955 n 32 0.853 0.834 0.702 6 5 7 0.907 7 0.871 7 Just after the reliability analyze some demographic variables of middle and senior managers of the thermal hotels were analysed by descriptive analysis. As shown in Table 2, a great majority of the participants are men (65.7%), and 39 participants are married (58.2%) while 41.8% of the population is single. More than half of 67 participants with 56.7% namely 38 managers are between the ages of 25 and 34. Other major group involves the participants whose ages are between 35 and 44. According to results in Table 2, 34.3% of the participants have bachelor degree, while 21 participants (31.3%) graduated from high school, and 15 participants (22.4) have associate’s degree. So, it can be said that a great majority of the middle and senior managers of thermal hotels in Afyonkarahisar are well educated with the percent of 57.7. Thus, we assumed that most of the middle and senior thermal hotel managers have information about KM 167 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu and they know how to use knowledge in accordance with a strategic perspective especially to gain competitive advantage in long term. 168 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey Table 2. Results of Some Demographic Variables of the Participants Variable Gender Age group Marital status Education Department Subdimension Male Female 24 and younger ages 25 to 34 ages 35 to 44 ages 45 to 54 ages Married Single Primary education High school graduated Associate's degree Bachelor degree Master/PhD degree Food and Beverage Front Office Housekeeping Spa-Wellness Accounting Sales Marketing Senior Management Public Relations Animation Technique Services Human Resources 44 23 65.7 34.3 Cumulative Percentage (%) 65.7 100 7 10.4 10.4 38 19 3 39 28 56.7 28.4 4.5 58.2 41.8 67.1 95.5 100 58.2 100 6 9.0 9.0 21 31.3 40.3 15 22.4 62.7 23 34.3 97.0 2 3.0 100 17 25.4 25.4 12 7 7 6 17.9 10.4 10.4 9.0 43.3 53.7 64.1 73.1 5 7.5 80.6 3 4.5 85.1 3 4.5 89.6 3 4.5 94.1 2 3.0 97.1 1 1.5 98.6 Frequency Percentage (n) (%) 169 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu Year of working experience in hotel Total (N)67 Missing Value Less than 1 year 1-5 years 6-10 years 11 years and above Missing Value 100 % 1 1.5 100 14 20,9 20.9 35 12 52,2 17,9 73.1 91.0 5 7,5 98.5 1 1,5 100 The descriptive analyze results indicate that 25.4% of the participants are working at Food and Beverage departments of the thermal hotels. Also, another major group consists of Front Office department chiefs/managers with the percentage of 17.9. Departments of the participants ranked after Front Office ranked as Housekeeping (10.4%), Spa-Wellness (10.4%), Accounting (9.0%), Sales and Marketing (7.5%), Senior Management (4.5%), Public Relations (4.5%), Animation (4.5%), and others (4.5%) including Technique Service and Human Resources. Thus, results of this study are largely depend on F&B, Front Office, Housekeeping and SpaWellness department chiefs/managers’ answers. Lastly, results show that a great majority of the participants have been working in the hotel from 1 year to 5 years (52.2%, n: 35). The percentage of middle and senior managers working for the less than one year is 20.9 with 14 participants. Degree of KM Use in Hotels In this section, the degree of KM processes used in thermal hotels was evaluated based on participants’ views with descriptive analysis. Means and standard deviations were calculated to determine participants’ response rates to the items. Participants’ views about KM processes are presented in Table 3. Due to the results of all items above 3.00 (No idea) mean level, it can be assumed that thermal hotels realize all required transactions in the scope of KM processes. 170 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey Table 3. Descriptive Analysis Results of Knowledge Management Processes Knowledge Utilization Knowledge Storage and Documentation Knowledge Sharing Knowledge Creation Knowledge Acquisition Subdimensions Items Our hotel frequently seeks new knowledge outside the organization. Our staff regularly gets new knowledge from external sources. Our hotel systematically analyses customer needs. Our hotel regularly captures knowledge of our competitors. Our hotel captures knowledge obtained from public research institutions including universities and etc. Our hotel regularly captures knowledge obtained from industrial associations, competitors, clients and suppliers. Our hotel frequently comes up with new ideas about our products and/or services. Our hotel frequently comes up with new ideas about our working methods and processes. If a traditional method is not effective anymore, our hotel develops a new method. Our hotel develops new ideas and innovations in collaboration between different departments. Our hotel develops new ideas and innovations in collaboration with external partners such as suppliers and clients. In our hotel information and knowledge are actively shared within the departments. Different departments actively share information and knowledge among each other. Employees and managers exchange a lot of information and knowledge. Our hotel shares a lot of knowledge and information with strategic partners. Our hotel shares knowledge with competitors (through industrial associations, directly, etc.). In our hotel, previously made solutions and documents are easily available. In our hotel, much knowledge is distributed in informal ways (in the corridors, break rooms, etc.). Our hotel does a lot of work to refine, organize and store the knowledge collected. The information sources, manuals and databases at our hotel's disposal are up-to-date. Hotel staff is systematically informed of changes in procedures, instructions and regulations. Our hotel has much information in the form of documents, databases. Our hotel possesses many core business processes and services. We are used to documenting in writing the things that are learnt in practice. We make sure that the most important experiences gained are documented. Our hotel uses existing know-how in a creative manner for new applications. Our hotel is able to use the employees' knowledge in various business activities. Our hotel responds to changes in our customers' needs. Our hotel achieved major process improvements as a result of analyzing and applying knowledge from external parties. Different departments of our hotel frequently apply knowledge that was x s.s 3.88 4.21 4.04 0.930 0.946 0.976 3.62 1.064 4.19 0.821 4.26 0.966 4.12 0.976 3.94 1.127 3.82 1.066 4.01 0.913 3.94 1.149 3.88 1.122 3.88 1.038 3.82 0.893 3.61 0.936 4.03 1.023 2.42 1.416 4.05 0.999 3.99 0.929 4.09 1.011 3.94 3.98 0.919 0.969 3.98 1.088 3.96 0.991 3.92 0.966 3.72 1.042 4.32 0.880 3.96 1. 134 3.75 1.146 171 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu shared by other departments. Many new ideas that our hotel develops are brought into reality. Our hotel’s databases and documented knowledge are frequently used by employees. 3.70 1.115 3.70 1.243 x: Mean, s.s: Standard Deviation. Results shown in Table 3 indicate that, analyzing of customers’ needs systematically (x: 4.21 and s.s: 0.946) is the most applied knowledge acquisition process. Capturing knowledge from industrial associations, competitors, clients and suppliers (x: 4.19 and s.s: 0.821) is the second highest knowledge acquisition process among other acquisition activities. This activity followed by seeking new knowledge outside the organization (x: 4.15 and s.s: 0.949). On the other hand, capturing knowledge obtained from public research institutions including universities is the least realized process when it is compared to the others. Participants’ views about knowledge creation process refers that respondent thermal hotels effectively creates new knowledge in different ways. Coming up with new ideas about hotel products and services (x: 4.26 and s.s: 0.966) is the most applied method in knowledge creation process among these ways. Coming up with new ideas about our working methods and processes (x: 4.12 and s.s: 0.976) is the second most applied transaction. Thus, we can assume that thermal hotels operating in Afyonkarahisar are considered developing new ideas important. Also, as it is seen in knowledge creation sub-dimension, thermal hotels develop new methods when a classic method is not effective anymore (x: 3.94 and s.s: 1.127), and also, thermal hotels develop new ideas in collaboration between departments (x: 3.82 and s.s: 1.066). But these two methods are relatively less applied among others in knowledge creation process. Participants’ views about knowledge sharing process indicate that thermal hotels share the knowledge effectively, except for distributing knowledge in informal ways. With respect to the results in knowledge sharing subdimension, availability of previous solutions and documents (x: 4.03 and s.s: 1.023) is the most important part of the knowledge sharing in thermal hotels. Sharing knowledge effectively within departments is the second most important way of knowledge sharing experiences (x: 3.94 and s.s: 1.149) in respondent hotels. As mentioned before, the least applied way to share knowledge in thermal hotels among the others is the distribution of necessary knowledge in informal ways (x: 2.42 and s.s: 1.416). This fact reflects two close-related and important situations in thermal hotels. First, thermal hotels generally use formal ways in communication and sharing knowledge. Second, by preferring formal ways especially in 172 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey communication, thermal hotels play an inhibiting role in sharing knowledge. Also, from the results about knowledge storage and documentation process, it can be seen that storage and documentation of knowledge is an important phase for KM in thermal hotels. Thus, all items regarding to storage and documentation have a mean level upper than 3.90. Informing hotel staff about changes in procedures, instructions and regulations (x: 4.09 and s.s: 1.011) is the most applied method in knowledge storage and documentation. This method is followed by refining, organizing and storing of collected data (x: 4.05 and s.s: 0.999), and updating information sources, manuals and databases (x: 3.99 and s.s: 0.929). Also, regarding the results, thermal hotels give an importance to possess core business processes and services (x: 3.98 and s.s: 1.088), documenting in writing (x: 3.98 and s.s: 0.969) and documentation of important experiences (x: 3.96 and s.s: 0.991). At the final stage of descriptive analyses about KM process, knowledge utilization degree in thermal hotels is evaluated using participants’ views. The results of this sub-dimension reflect that thermal hotels use knowledge in order to rapidly changing customers’ needs (x: 4.32 and s.s: 0.880). When we consider the achievement of a hotel establishment basically depending on satisfying customer, using knowledge for better services becomes more and more important. Thus, we can clearly state that thermal hotels in Afyonkarahisar are aware of the importance of KM. Regarding results, achieving major process developments by gathering and analyzing knowledge from external parties (x: 3.96 and s.s: 1.134) is the second highest way in knowledge utilization. Other important using areas of knowledge in thermal hotels are developing new applications via know-how (x: 3.92 and s.s: 0.966), application of shared knowledge in different departments (x: 3.75 and s.s: 1.146), using employees’ knowledge in business activities (x: 3.72 and s.s: 1.042). If we summarize the descriptive results about KM, thermal hotels operating in Afyonkarahisar give importance to KM, and as a result KM processes are highly applied in these hotels. When we consider subprocesses in KM processes, knowledge creation (x: 4.03) is the most applied sub-process among the others. Knowledge acquisition (x: 4.02) and knowledge storage and documentation (x: 4.00), knowledge use (x: 3.85) and knowledge sharing (x: 3.65) sub-processes follow knowledge creation sub-process. Thus, it can be assumed that in thermal hotels, KM 173 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu is an essential part of providing service quality and gaining competitive advantage in the scope of strategic management. 174 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey Discriminant Analyses of KM Processes At this last phase of data analyses, to determine whether KM processes vary regarding to different thermal hotels and some demographic variables of participants. In this context, firstly a Kruskal-Wallis H test performed in order to determine whether KM process differs according to respondent hotels. Kruskal-Wallis H test results presented in Table 4 indicate that KM processes differ in the context of thermal hotels (p<0.05 and p: 0.01). So, it can be figured out that each thermal hotel operating in Afyonkarahisar is applying its own KM project. Then, it can be assumed that each hotel ownssome core KM steps which vary their KM project from other thermal hotels in Afyonkarahisar. And, thus we can assume that KM projects are considered as a core competence by thermal hotels. Table 4. Kruskal-Wallis H Test Results Regarding to Thermal Hotels ChiSquare 19.875 13.762 14.050 10.205 KM process in general Knowledge acquisition Knowledge creation Knowledge sharing Knowledge storage and 19.423 documentation Knowledge utilization 24.436 *: Correlation is important at 0.05 significant levels. df Asymp. Sig. 4 4 4 4 0.001* 0.008* 0.007* 0.037* 4 0.001* 4 0.000* After determining KM processes which differ regarding to thermal hotels, Manny-Whitney U test and Kruskal-Wallis H tests were performed in order to identify whether KM processes differ regarding to participants’ demographic variables. In this context, firstly Manny Whitney U tests were performed to see whether KM processes differs regarding to gender of the participants. Second, Kruskal-Wallis H tests were performed in order to determine whether KM processes differ in terms of different age group, education level, working department and year of working experience of participants. In all tests Asymp. Sig. which refers significant level is higher than 0.05 for general KM processes and its sub-dimensions. So, KM processes in thermal hotels do not significantly differ regarding to gender, age group, education level, working department and year of working experience of who took part in the study. 175 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu According to results of discriminant analysis presented in earlier paragraph, it is assumed that KM processes are not related with demographic variables of middle and senior managers in thermal hotels. When this fact has been taken into consideration within the scope of strategic management, it is seen that middle and senior managers apply similar KM processes in thermal hotels. Thus, thermal hotels apply KM processes in the scope of strategic management as their core competence, but these projects do not depend on managers’ demographic variables. Conclusion In today’s intensive competitive environment, thermal hotels improve their services with new strategic management tools in a creative manner. As one of these management tools, KM is gaining more importance among tourism industry and among thermal hotels as an important contributor to tourism industry. On the other hand, since the KM applications are relatively new in thermal hotels, there are still many problems in application KM processes. Furthermore, some hoteliers still do not have enough knowledge about KM processes. Thus, with this study evaluating KM processes in thermal hotels, it is aimed to provide a basic resource to the hoteliers and the related literature. According to the results of this study, thermal hotels operating in Afyonkarahisar give importance to KM. As a result, KM processes are highly applied in respondent hotels. Among them, knowledge creation is the most applied KM process and knowledge acquisition, knowledge storage and documentation, knowledge utilization and knowledge sharing follows knowledge creation process. On the other hand, KM projects differ according to each thermal hotel. So, it can be concluded that each thermal hotel has its own specific methods or steps in KM processes. Also, results show that KM projects are independent from demographic characteristics of hotel managers. Thermal hotels should consider some suggestions given below in order to gain more benefit from KM processes. First of all, all respondent thermal hotels should be in collaboration with academic institutions in the scope of gathering external knowledge and making this knowledge usable in KM. For example, thermal hospitality enterprises can obtain knowledge on new treatment methods from universities and use them in their curing units. In addition, thermal hospitality enterprises can develop joint training programs with universities to improve ability and qualifications of their employees. Second, thermal hotels should develop much more processes that support 176 Journal of Economic and Social Studies �Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey knowledge sharing among departments. As well as formal knowledge flow, development of technology infrastructure which enables the enterprises to provide an electronic platform (intranet, e-mail etc.) to exchange information between employees can be encouraged. For example, the knowledge on diet programs prepared by the specialists in cure centers can be transferred to kitchen, service and front-office departments electronically. Electronic knowledge databases which provide access to all essential information for the departments can be formed.Third, knowledge sharing processes should be reconsidered in the hotels. In this context infrastructures required by new technologies can be formed to accelerate the flow of knowledge among departments. Fourth, effective using of knowledge databases should be encouraged among employees. The level of authorization of all staff can be increase to obtain all the necessary knowledge from the automation systems used in thermal hotel enterprises. For example, a cure centre employee can be authorized to get knowledge related to other departments from the joint databases. Fifth, informal communication should be supported to promote transforming of tacit knowledge to explicit knowledge. In this context, especially during breaks, the practices can be promoted to share the knowledge related to employees’ works. For instance, instead of unnecessary conversations like gossiping during the break, employees can be encouraged to be with knowledge facilitator in managerial position and share the knowledge. During the working hours, various social activities which enable employees to come together and exchange knowledge can be planned. In the process of socialization, asking newly recruited employees to work with the experienced employees in a master-apprentice relationship for a certain period of time speeds up the process of socialization as well as transfer of tacit knowledge into explicit knowledge can be possible through with working with experienced employees and new employees together. Sixth, thermal hotels should benefit more from experiences and expertise of employees. Empowerment practices and practices to allow employees to use their initiative and take more responsibility can be realized. And at last, in KM process, applying of developed ideas can improve knowledge sharing and motivation and satisfaction of employees. Application of this research in a limited area such as seven thermal hotels in Afyonkarahisar is one of limitations of this study. Also, lack of quantitative researches about KM processes in tourism industry makes it difficult to compare the results of this study with other studies. Finally, to understand KM concept in hospitality industry, more detailed studies should be conducted and results of those studies should be compared with this study. For instance, similar studies should be conducted in different regions and in different hospitality enterprises. Relation between 177 �Ahmet Baytok, Hasan Hüseyin Soybali, Ozcan Zorlu knowledge management and innovation and other related subjects must be analyzed. Information technologies and its impact on knowledge management in hotels should be investigated with future studies. References Afyonkarahisar İl Kültür ve Turizm Müdürlüğü (2013). Afyonkarahisar ili 2012 yılı turizm istatistikleri. Alavi, M. & Leidner, D. E. (1999). Knowledge management systems: Issues, Challenges, and Benefits. Communications of AIS, 1, 2-37. Al-Busaidi, K. A. (2011). Leveraging organizational knowledge management through corporate portal. In A. Fred, J. L. G. Dietz & L. Kecheng (Eds.) 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Journal of Knowledge Management, 15 (2), 313-328. Schönström, M. (2005). Creating knowledge networks: Lessons from practice. Journal of Knowledge Management, 9 (6), 17-29. Shi, X. (2010). Knowledge management in China and in Finland: A cross-country comparison. Lappeenranta University, Master’s Thesis. Lappeenranta: Russia. Stapleton, J. J. (2003). Executive’s guide to knowledge management. USA, New Jersey: John Wiley & Sons, Inc. Sun, P. (2010). Five critical knowledge management organizational themes. Journal of Knowledge Management, 14 (4), 507-523. Tiwana, A. (2003). Bilgininyönetimi. (E. Özsayar, Trans.) Dışbank Kitapları–5, İstanbul: Rota YayınYapımTanıtım Tic. Ltd. Şti. (Original work published 1999). Wiig, K. M. (1999). Successful knowledge management: Does it exist? Manuscript for the European American Business Journal. 1-6. 182 Journal of Economic and Social Studies � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2401 Title A name given to the resource Knowledge Management Processes in Thermal Hotels: An Application in Afyonkarahisar Province, Turkey Author Author BAYTOK, Ahmet SOYBALI, Hasan Hüseyin ZORLU, Özcan Abstract A summary of the resource. This study aims to analyze knowledge management (KM) processes in thermal hotels in Afyonkarahisar province in Turkey. Within the scope of this research, the KM processes applied in thermal hotels have been determined through conducting questionnaire surveys. Descriptive analyses of hotel managers’ views on KM processes were presented. Also, discriminant analysis was used to determine differences between participants’ views based on their demographic characteristics. As a result of the study, it was found that thermal hotels highly apply KM processes. Knowledge creation is the most applied KM process among others. In addition, it was found that informal communication should be encouraged in order to improve knowledge sharing. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-03-15 Keywords Keywords. Article PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/478a6ae5bd5c4a1c391a72aed41a2273.docx 1352db8aaa45d9b52dfb8e1e5570df1b https://omeka.ibu.edu.ba/files/original/3a22ad7379cba99a40b05a3b5c6274b8.pdf 1e7940270f688355a9cf92b5cbff78d8 PDF Text Text External Environment Analysis: A Focus on SME’s in the Republic of Macedonia Izet Zeqiri South East European University Macedonia i.zeqiri@seeu.edu.mk Brikend Aziri South East European University Macedonia b.aziri@seeu.edu.mk Abstract: External environment analysis during the last couple of decades has become one of the main issues in contemporary business organizations. The main objective of this paper is not to simply address the widely spread and accepted body of knowledge in the field of external environment analysis, but rather to provide a description insights regarding the implementation of the widely known techniques for external environment analysis by SME’s in the Republic of Macedonia, more particularly in the Pollog region . The paper is based on a practical questionnaire analysis of SME managers in the Republic of Macedonia and strives to provide insides regarding the degree to which external analysis is conducted by the companies and determine the main barriers influencing their implementation. Keywords: external environment, techniques, SME, Macedonia. 154 �154 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2615 Title A name given to the resource External Environment Analysis: A Focus on SME’s in the Republic of Macedonia Author Author ZEQIRI, Izet AZIRI, Brikend Abstract A summary of the resource. External environment analysis during the last couple of decades has become one of the main issues in contemporary business organizations. The main objective of this paper is not to simply address the widely spread and accepted body of knowledge in the field of external environment analysis, but rather to provide a description insights regarding the implementation of the widely known techniques for external environment analysis by SME’s in the Republic of Macedonia, more particularly in the Pollog region . The paper is based on a practical questionnaire analysis of SME managers in the Republic of Macedonia and strives to provide insides regarding the degree to which external analysis is conducted by the companies and determine the main barriers influencing their implementation. Keywords: external environment, techniques, SME, Macedonia. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-04 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/0442f7e6ef04996b0fbd8bc3c2348af8.docx 20512ca6482c801a82a1a021f3b01a1c https://omeka.ibu.edu.ba/files/original/e0094cc084779d63e02247a53e408dd0.pdf aa141b7594707174d2993c751aff0b5c PDF Text Text Creating Value for Leasing Service Customers on the Example of VB Leasing In the Market of Bosnia And Herzegovina Slobodan Vujić VB Leasing BH Bosnia And Herzegovina slobodan.vujic@vbleasing.ba Saša Vujić University “VITEZ” Travnik Bosnia And Herzegovina vujic.sasa1@gmail.com Aida Abduzaimović University “Vitez” Travnik Bosnia And Herzegovina aida.abduzaimovic@unvi.edu.ba Ibrahim Obhodas University “VITEZ” Travnik Bosnia And Herzegovina ibrahim.obhodjas@unvi.edu.ba Abstract: The paper is aimed at analyzing the process of creating the customer value added in the area of leasing services, as well as at determining what the value added implies for leasing product customers. The leasing company's goal is to develop and maintain its client relations through creating the leasing service customer value added, and thus achieve increased business efficiency and an increase in its market share. The paper will analyze advantages and disadvantages of the leasing package, both from economic and from financial aspect of leasing. Leasing package development is based on the mutual economic interest of both lessor and lessee. The financial basis of leasing is financing, i.e. acquisition of given goods without engaging one's own capital and without entering a classic loan-based relationship. The paper will also discuss types of leasing that are the most frequent in Bosnia and Herzegovina market. In order to determine what represents the total value for the leasing service customer, for the paper purposes, we will conduct primary research pertaining to the importance of individual elements in dealing with a leasing company, and study the present customer satisfaction in dealing with leasing companies. Data will be collected through survey questionnaires with close ended questions based on the Likert scale from one to five. Survey questionnaire will comprise two parts: the importance of individual elements dealing with a leasing company and the present customer satisfactions in dealing with a leasing company. Each part will comprise five elements. The respondents will be requested to rank each element according to importance in dealing with a leasing company. The questionnaire surveys will be distributed among leasing customers, legal and private persons in Bosnia and Herzegovina. 500 questionnaire surveys will be distributed. Besides the described primary data, the analysis will also use the secondary data of international and local organizations involved in analyzing the leasing market. The research will provide an insight into what affects the creation of the leasing service customer value added, and how it is reflected on the company's market share. Keywords: operational leasing, financial leasing, service, customer value added, marketing. 162 �162 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2642 Title A name given to the resource Creating Value for Leasing Service Customers on the Example of VB Leasing In the Market of Bosnia And Herzegovina Author Author VUJIĆ, Slobodan VUJIĆ, Saša ABDUZAIMOVIĆ, Aida OBHODAŠ, Ibrahim Abstract A summary of the resource. The paper is aimed at analyzing the process of creating the customer value added in the area of leasing services, as well as at determining what the value added implies for leasing product customers. The leasing company's goal is to develop and maintain its client relations through creating the leasing service customer value added, and thus achieve increased business efficiency and an increase in its market share. The paper will analyze advantages and disadvantages of the leasing package, both from economic and from financial aspect of leasing. Leasing package development is based on the mutual economic interest of both lessor and lessee. The financial basis of leasing is financing, i.e. acquisition of given goods without engaging one's own capital and without entering a classic loan-based relationship. The paper will also discuss types of leasing that are the most frequent in Bosnia and Herzegovina market. In order to determine what represents the total value for the leasing service customer, for the paper purposes, we will conduct primary research pertaining to the importance of individual elements in dealing with a leasing company, and study the present customer satisfaction in dealing with leasing companies. Data will be collected through survey questionnaires with close ended questions based on the Likert scale from one to five. Survey questionnaire will comprise two parts: the importance of individual elements dealing with a leasing company and the present customer satisfactions in dealing with a leasing company. Each part will comprise five elements. The respondents will be requested to rank each element according to importance in dealing with a leasing company. The questionnaire surveys will be distributed among leasing customers, legal and private persons in Bosnia and Herzegovina. 500 questionnaire surveys will be distributed. Besides the described primary data, the analysis will also use the secondary data of international and local organizations involved in analyzing the leasing market. The research will provide an insight into what affects the creation of the leasing service customer value added, and how it is reflected on the company's market share. Keywords: operational leasing, financial leasing, service, customer value added, marketing. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-04 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/7f1b0e8dbc521f7b76bf046c1a7b3656.docx 36f587c23f494df393cd8a9b23c77dd3 https://omeka.ibu.edu.ba/files/original/947f380c489f1744693765428a478191.pdf 396f1493a321a0094c6e84f80994fdfd PDF Text Text A Field Research about Oppression Incurred Upon Woman Entrepreneurs in Patriarchal Societies Metin Uluköy Balıkesir University Turkey mulukoy@hotmail.com Yavuz Akçi Adıyaman University Turkey yavuzakci@gmail.com Abstract: In societies where men are dominant, women generally live under the domination of men. In these societies; women do not think, produce and express an opinion. According to man; woman does household chores, take care of children and provide fundamental requirements of man. Women have recently started to involve more in societies because of development of information, technology and education system and raising economic level of societies. This situation made the effect of man domination decrease significantly. It is especially seen that women recently trust themselves more and start entrepreneurship activities to gain economic independence. Technological advancements, increase in education levels and government policies aimed at women caused this situation. How was seen entrance of women into business life by man and which type of pressures were implemented to women entrepreneurs were needed to be as research topic, so this study was done. For this purpose, a survey which consists of 13 questions was prepared by making literature review. The questionnaire included both entrepreneurship qualities and difficulties which were faced by woman entrepreneurs. The questionnaire was conducted to those women who constructed a business in Adiyaman and Balikesir. It was reached 84 woman entrepreneurs who met the requirements and face to face questionnaires were conducted. Analyses were done by entering data to SPSS 20.0 program data file. Reliability of measurement (Cronbach’s Alpha) was seen as 0,818 in these analyses. It was seen that being innovative and having high self confidence are becoming prominent characteristics in question which is related to the qualities which must entrepreneurs have. It was also seen that they used mainly equity in establishment of their businesses. Also, KOSGEB and Micro credit possibilities were utilized by them. In addition, it was seen that woman entrepreneurs did not suffer oppression in establishment and operation of their businesses. It was seen that there is not significant differences between various demographic attributes with entrepreneur skills and oppression with initiative barriers of woman entrepreneurs. The result of this study is expected to promote and encourage woman entrepreneur candidates. Keywords: Entrepreneurship, Entrepreneurial Characteristics, Entrepreneurship suppression, Entrepreneurship Education. Women Entrepreneurs, 163 �163 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2643 Title A name given to the resource A Field Research about Oppression Incurred Upon Woman Entrepreneurs in Patriarchal Societies Author Author ULUKOY, Metin AKCI, Yavuz Abstract A summary of the resource. In societies where men are dominant, women generally live under the domination of men. In these societies; women do not think, produce and express an opinion. According to man; woman does household chores, take care of children and provide fundamental requirements of man. Women have recently started to involve more in societies because of development of information, technology and education system and raising economic level of societies. This situation made the effect of man domination decrease significantly. It is especially seen that women recently trust themselves more and start entrepreneurship activities to gain economic independence. Technological advancements, increase in education levels and government policies aimed at women caused this situation. How was seen entrance of women into business life by man and which type of pressures were implemented to women entrepreneurs were needed to be as research topic, so this study was done. For this purpose, a survey which consists of 13 questions was prepared by making literature review. The questionnaire included both entrepreneurship qualities and difficulties which were faced by woman entrepreneurs. The questionnaire was conducted to those women who constructed a business in Adiyaman and Balikesir. It was reached 84 woman entrepreneurs who met the requirements and face to face questionnaires were conducted. Analyses were done by entering data to SPSS 20.0 program data file. Reliability of measurement (Cronbach’s Alpha) was seen as 0,818 in these analyses. It was seen that being innovative and having high self confidence are becoming prominent characteristics in question which is related to the qualities which must entrepreneurs have. It was also seen that they used mainly equity in establishment of their businesses. Also, KOSGEB and Micro credit possibilities were utilized by them. In addition, it was seen that woman entrepreneurs did not suffer oppression in establishment and operation of their businesses. It was seen that there is not significant differences between various demographic attributes with entrepreneur skills and oppression with initiative barriers of woman entrepreneurs. The result of this study is expected to promote and encourage woman entrepreneur candidates. Keywords: Entrepreneurship, Entrepreneurial Characteristics, Women Entrepreneurs, Entrepreneurship suppression, Entrepreneurship Education. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-04 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/98402a7d5e6f3ce851371d13b75a3592.docx bc1f28d9122b151e8200942e1786af35 https://omeka.ibu.edu.ba/files/original/cfd9344e3897d732c2977cd6c8582a5c.pdf 4f0341e248c2f32a0e7b849e2fc49e9c PDF Text Text How The Level Of Emotional Intelligence Affects Opportunity Identification? Seda Tüysüz Erzurum Atatürk University Turkey sedatuysuz@hotmail.com Ülke Hilal Ağırman Erzurum Atatürk University Turkey ulkecelik@hotmail.com Ömer Faruk İşcan Erzurum Atatürk University Turkey oiscan@atauni.edu.tr Abstract: Opportunity identification is emerging as a critical component of the entrepreneurial process representing the ‘most distinctive and fundamental entrepreneurial behavior’ (Hayton et. al. 2011; 15). Opportunity recognition has long been accepted as a key aspect of the entrepreneurial process (Ozgenve Baron, 2007:174). The issue why some individuals take advantage of opportunities and some cannot is usually studied. While some studies found that personality traits, psychological variables and demographic factors may affect on entrepreneurial activity, other researchers have looked to the importance of social capital and network ties to new venture creation. In this study, we focus on the effects of emotional intelligence on opportunity identification. We attempt to explain these effects by creating a theoretical framework that considers the interaction between emotional intelligence levels and opportunity identification. To test research hypotheses, data will be gathered from students at the Business Program of The Faculty of Economics and Administrative Sciences in a university in Turkey. The resulting data will be analyzed by appropriate statistical methods. In accordance with this analysis, it will be determined whether individuals' emotional intelligence level has an impact on opportunity identification skills. Keywords: Opportunity identification, emotional intelligence, entrepreneurial process. 155 �155 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2616 Title A name given to the resource How The Level Of Emotional Intelligence Affects Opportunity Identification? Author Author TUYSUZ, Seda AGIRMAN, Ulke Hilal ISCAN, Omer Faruk Abstract A summary of the resource. Opportunity identification is emerging as a critical component of the entrepreneurial process representing the ‘most distinctive and fundamental entrepreneurial behavior’ (Hayton et. al. 2011; 15). Opportunity recognition has long been accepted as a key aspect of the entrepreneurial process (Ozgenve Baron, 2007:174). The issue why some individuals take advantage of opportunities and some cannot is usually studied. While some studies found that personality traits, psychological variables and demographic factors may affect on entrepreneurial activity, other researchers have looked to the importance of social capital and network ties to new venture creation. In this study, we focus on the effects of emotional intelligence on opportunity identification. We attempt to explain these effects by creating a theoretical framework that considers the interaction between emotional intelligence levels and opportunity identification. To test research hypotheses, data will be gathered from students at the Business Program of The Faculty of Economics and Administrative Sciences in a university in Turkey. The resulting data will be analyzed by appropriate statistical methods. In accordance with this analysis, it will be determined whether individuals' emotional intelligence level has an impact on opportunity identification skills. Keywords: Opportunity identification, emotional intelligence, entrepreneurial process. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-04 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/61506d5c3204bc0856d99cc56b393767.docx 7722cc7a15ef2d9ad45af9a3a14bd0c2 https://omeka.ibu.edu.ba/files/original/84db7eced88457bf1d97f1f10882cc10.pdf 5c3281536f81b85d1129ea2738bf12e3 PDF Text Text An Evaluation of Municipality Services in Sivas, Turkey through the lens of CSS scope Hasan Tağraf Cumhuriyet University Turkey hasan157@hotmail.com Ahmet Murat Özkan Cumhuriyet University Turkey ahmetmozkan@hotmail.com Görkem Nemutlu Cumhuriyet University Turkey gorkemnemutlu@gmail.com Abstract: For quite a long time, municipalities in Turkey are offering a wide array of exceptional services such as art courses, dining & drinking, health & elderly care, cultural services etc. In this paper, through public administration and Turkish law, we take a look at basic missions of municipalities and then, move on for an evaluation of these exceptional services through corporate social responsibility perspective. Our work tries to answer the question whether these municipality actions can be considered as socially responsible management or not. Authors argue that, due to increased competition among political parties, municipalities are expanding their services beyond their mission stated in Turkish law. We also visit the concept of corporate social responsibility in this paper and provide brief descriptions from existing literature. In the last section of the paper, we conduct a quantitative survey with the residents of Sivas city. By using this survey, we aim to understand how residents of Sivas evaluate –beyond mission- services of their municipality. Our survey includes questions and/or factors from European Union CSR initiative. We hope that results of this paper can open directions for further CSR and public administration research. With an emphasis on mission, responsibility and evaluation concepts, municipalities can review their stance and researchers can expand these empiric results for further knowledge creation. Keywords: public, administration, municipality, corporate, social, responsibility. 172 �172 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2652 Title A name given to the resource An Evaluation of Municipality Services in Sivas, Turkey through the lens of CSS scope Author Author TAGRAF, Hasan OZKAN, Ahmet Murat NEMUTLU, Gorkem Abstract A summary of the resource. For quite a long time, municipalities in Turkey are offering a wide array of exceptional services such as art courses, dining & drinking, health & elderly care, cultural services etc. In this paper, through public administration and Turkish law, we take a look at basic missions of municipalities and then, move on for an evaluation of these exceptional services through corporate social responsibility perspective. Our work tries to answer the question whether these municipality actions can be considered as socially responsible management or not. Authors argue that, due to increased competition among political parties, municipalities are expanding their services beyond their mission stated in Turkish law. We also visit the concept of corporate social responsibility in this paper and provide brief descriptions from existing literature. In the last section of the paper, we conduct a quantitative survey with the residents of Sivas city. By using this survey, we aim to understand how residents of Sivas evaluate –beyond mission- services of their municipality. Our survey includes questions and/or factors from European Union CSR initiative. We hope that results of this paper can open directions for further CSR and public administration research. With an emphasis on mission, responsibility and evaluation concepts, municipalities can review their stance and researchers can expand these empiric results for further knowledge creation. Keywords: public, administration, municipality, corporate, social, responsibility. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-04 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/ab48b7a9378f9b20f251acd2906f4122.docx d2fe1318bff95403b97f9f66e8e6b36b https://omeka.ibu.edu.ba/files/original/54b94a1abfb3ee21ea9080e44e4c6e10.pdf 2ddbe4c77e420f232baf947b29183ae5 PDF Text Text A Comprehensive Look at Generation Z and Their Expectations from Public Administration Hasan Tağraf Cumhuriyet University Turkey hasan157@hotmail.com Görkem Nemutlu Cumhuriyet University Turkey gorkemnemutlu@gmail.com Ahmet Murat Özkan Cumhuriyet University Turkey ahmetmozkan@hotmail.com Abstract: One can argue that there is vast amount of difference in behavior and expectation of generations. In this paper, we try to bring together some insights about generation z and their role in today's world. Firstly, we take a brief look at the phenomenon and review basic descriptions. We try to demonstrate basic differentiation of this new generation. We have seen some revolts and riots throughout the world, mostly led by generation z, against governments. Based on these definitions and actions, secondly, we try to develop empirical knowledge of generation z's main expectations from public administration, using a questionnaire conducted on a limited number of generation z members. Authors are using a quantitative research methodology on this paper, with the aim of understanding how expectations of generation z differ from previous ones. Based on some factors from existing literature, we argue that they demand more transparency, accountability, social welfare and fair administration. Current study can be expanded as; comparative studies based on similar questionnaire with members of other generations. Some limitations of the study should be noted as well. Sample group is selected on a narrow geographical location and in limited numbers. Time and budget constraints prevented researchers from reaching a wider sample group. In summary, this paper tries to focus on generation z and their expectations from public administration. Keywords: generation z, public administration. 173 �173 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2653 Title A name given to the resource A Comprehensive Look at Generation Z and Their Expectations from Public Administration Author Author TAGRAF, Hasan OZKAN, Ahmet Murat NEMUTLU, Gorkem Abstract A summary of the resource. One can argue that there is vast amount of difference in behavior and expectation of generations. In this paper, we try to bring together some insights about generation z and their role in today's world. Firstly, we take a brief look at the phenomenon and review basic descriptions. We try to demonstrate basic differentiation of this new generation. We have seen some revolts and riots throughout the world, mostly led by generation z, against governments. Based on these definitions and actions, secondly, we try to develop empirical knowledge of generation z's main expectations from public administration, using a questionnaire conducted on a limited number of generation z members. Authors are using a quantitative research methodology on this paper, with the aim of understanding how expectations of generation z differ from previous ones. Based on some factors from existing literature, we argue that they demand more transparency, accountability, social welfare and fair administration. Current study can be expanded as; comparative studies based on similar questionnaire with members of other generations. Some limitations of the study should be noted as well. Sample group is selected on a narrow geographical location and in limited numbers. Time and budget constraints prevented researchers from reaching a wider sample group. In summary, this paper tries to focus on generation z and their expectations from public administration. Keywords: generation z, public administration. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-04 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 H Social Sciences (General)