QUATERLY JOURNAL
ISSN 2415-0371
Vol. 4 No. 2
Peer
Reviewed
Scientific Journal
in Social Science
BOAD OF EDITORS
INTERNATIONAL JOURNAL OF RESEARCH &
METHODOLOGY IN SOCIAL SCIENCE is a peer
reviewed scientific journal in social science and
its interdisciplinary fields. The journal is
published quarterly. The Boards of Editors
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EDITOR-IN-CHIEF
Paul T.I. Louangrath ………………………………………… AEC & USA
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BOARD OF EDITORS FOR ACQUISITION
Arfat Ahmad Sofi, Ph.D. ………………………………………… India
Galinoma G. Lubawa, MBA ………………………………………… Tanzania
Lukman Olorogun, Ph.D. ………………………………………… Malaysia
Nitin Vihari, Ph.D. ………………………………………… India
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TABLE OF CONTENT
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Language Acquisition
Part 1 of 3
Dante Roberto Salatino
ABSTRACT
In this paper, we will develop some aspects of a psycholinguistic theory that tries to explain how
our natural language is acquired. We have divided this paper into three parts: First part: includes a
brief review of different theories on language acquisition that are valid today, used as a contrast
element. In particular, we will analyze in depth the model R-R (representational redescription) of
Karmiloff-Smith, contrasting its cognitive-computational model with our approach. Then, using
evolutionary biology as a model, we will address the relevance of a Universal Language existing in
socio-cultural reality and its genetic aspects. Second part: it will deal with a possible Genetic
Typology of the natural human language elaborated on the base of the theory of the “hidden
colors.” Third part: we will highlight the relevance of the Universals, a possible origin of the lexical
contextures, and an analysis of the importance of socio-cultural inheritance, all fundamental
elements in the acquisition of natural human language.
CITATION:
Salatino, D. R. (2018). “Language acquisition – Part 1 of 3.” Inter. J. Res. Methodol. Soc. Sci., Vol.,
4, No. 2: pp. 1-14. (Apr. – Jun. 2018); ISSN: 2415-0371.
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1.0 INTRODUCTION
The biological pattern, necessary for language to emerge, is only part of the story. The other part,
which we will develop in this work, is as or more important than the first. It is not possible to
approximate an adequate response to the problem of acquisition if the social aspects of the origin of
natural language are not addressed coherently. Every individual or social subject has a double need,
a primary one, that of survival manifested as desire and a secondary one, that of knowing,
manifested as a belief. The social in the individual arises from a desire that ‘represents’ it at a deep
level and from a belief that characterizes at the superficial level, the object of that desire. For this,
we must make a refined characterization of the third adaptive system in which we have divided, for
its study, the subjective reality (Salatino, 2009). That is the socio-cultural system. First, we will
review some current theories to contrast them with our approach, then to analyze in detail the socio-
cultural system.
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the skill is achieved, the parts are “compiled” (a term used by Fodor), to be executed quickly,
automatically and unconsciously. Paradoxically, he warns that all this should not be confused with a
Fodor module, which was designed as a computer dedicated to a special purpose and owner of its
own “database.”
Entry systems - says the author (Loc. Cit.) – “are the parts of the human mind inflexible and
lacking in intelligence. They represent the stupidity of your machine.” It continues, during several
pages, criticizing the proposal of Fodor, but it does not obtain another thing that to adhere more and
more, unconditionally, to her. However, he makes a strong defense of his aphorism: “development
implies a process that consists of going beyond modularity.”
As for the theory itself, it is based on the proposal of domains that should not be confused
with modules, so that, now the development is of specific domains and not modules. These domains
will include language, mathematics, physics, etc. besides, incorporating in their description micro-
domains, such as gravity in the domain of physics, or pronouns in the language domain. This
justifies it because it is going to propose a model of phases of development, instead of the well-
known Piagetian model of stages, which he calls behaviorist and where the baby's mind is empty of
knowledge.
She points out the notion of development restrictions (Op. Cit., P.9), where he says that for
the general domain theorist (i.e., Piaget), the word restriction has a negative connotation; that is, it
refers to factors that reduce the child's competence. On the other hand, for the specific domain
theorist (that is, the author), it has a positive connotation, since, by limiting the space of possible
hypotheses, they enhance learning.
Then he evaluates the new ‘paradigms to study babies,’ not relevant at all, ending with the
proposal of his paradigm, which he baptizes as the process of representational redescription. (R-R)
The RR model, which took several years to elaborate, incorporates a reiterative process of
representational redescription, which would be a procedure by means of which the information that
is 'implicit' in mind, becomes explicit knowledge for it, first within of a specific domain (for
example, physics), to then do it in micro-domains and even across different domains. He explains
that this whole process occurs spontaneously and as a consequence of an ‘internal impulse’ that
pushes the formation of intra- and inter-domain relations. It is characterized as a phase model, of an
endogenous nature and establishes it as an essential tool for theoretically locating empirical
research. That will be dedicated to defining the child as linguist, physicist, mathematician,
psychologist, and graphic artist or draftsman, which are the successive chapters that make up a book
that, at this point, has not yet begun.
We will not address all these chapters, instead and in a very superficial way, only the one
that is dedicated to the child as a linguist. And within it, we will say in the form of a tight summary
that, according to the author the child, to acquire the language, part of attentional biases towards
specifically linguistic information and innately specified. Then, using data abstraction mechanisms,
he achieves a ‘behavioral mastery’ that allows it to cross several levels of representational
redescription, to be finally able to ‘formulate verbally communicable theories’ on how the system
work. She clarifies, however, that this is not all, but that he then has to develop the passage of the
sentence functions of the different linguistic markers already acquired, to his discursive functions,
which allow him to structure the narrations as a unit.
All the previous description, the author makes it against the Piagetian model to which he
denounced but to the one who does not harm since all its conclusions are arbitrary and based on
‘experiments’ prepared to obtain what was sought to be demonstrated.
Karmiloff-Smith's theory, as we have seen, ends up being a sarcastic criticism, although not
biting, of Piaget’s work, confronted without the resources that such an endeavor would have
required. It constitutes, in my view, a lukewarm stance between Chomskian innateness-mentalism
and Piagetian cognitive-constructivism, which does not provide elements of value to prefer it, rather
than its sources of inspiration, that despite their mistakes, have a degree much greater coherence.
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The previous figure confirms, on the one hand, the interrelationships that are established
between the desire and the belief in a social individual, that is to say, the imposed or voluntary
character of each of them and the emergence from there of the different beliefs. The codes assigned
in the graph obey to have considered the desire as a heritage of the subject and the belief as an
object of that desire. On the other hand, this scheme corroborates, without a doubt, that the logical
core of every social act as we see it here is a PAU (universal autonomous pattern), according to the
definition given by the Transcurssive Logic (TL) (see Appendix).
On the other hand, the needs that give rise to the social act are satisfied through the ‘social
patterns’ that are evidenced, individually, in the behavior of the subject or individual and at the
social level, in the behavior of a person, through a series of ‘social figures.’
These 'social figures' fulfill the non-trivial function of establishing the ‘social role’ that
becomes evident through a specific behavior; that is, for that behavior that is limited by a norm, see
Figure 2. The two social aspects considered are vital when it comes to establishing how we acquire
our natural language.
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Fig. 2: Logic of social relations
The REM thus defined, shows as a logical relational core a PAU. Where does the first REM come
from?
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The biologist Julián Huxley (1939, p.87) shows us that attempts to extrapolate biological
conclusions to human aspects are supported in an invulnerable logic. This is so because everything
social occurs exclusively between living beings who evolve as members of a community. No living
being can deny this situation, even if it wanted to. Therefore, they are bound by a question of
individual survival, to act together.
According to Huxley (Op. Cit., p.98), man departs from everything that is alive, not because
his immeasurable bearing diminishes the rest of living beings under his shadow, but because man is
capable of thinking and speaking. These two evolutionary achievements allow him while sharing
the biological inheritance with all other organisms, to access another type of inheritance that
empowers the word (oral and written). This is manifested in a continuous collection of experiences,
which from generation to generation, constitutes what we know as tradition. As an expressive
projection of its natural language, which configured by ideas and thoughts, In humans, according to
Huxley (Op. Cit., p.99), there are two types of inheritance: (a) Biological mediated by germ cells
and modulated by natural selection (genetic inheritance), and (b) The inheritance of experience or
social, which is transmitted through tradition. It is the one that allows human being to inherit
acquired characters (epigenetic heritage).
In man, the development of a more complex psyche allowed him to have a natural symbolic
language. This provided him with a notorious capacity to penetrate deeply into a past that was
traditionally preserved for him. This heritable “collective memory” is the one that in this study, we
will call, if I am allowed the term, “social DNA,” the germinal base of culture.
We will use the concept of symbiosis as an evolutionary and even germinating element,
under a particular aspect, to explain how the first REM could have emerged.
Finally, we will take from biology to project it into the social the concept of development
and progress that complement the germinally new forms emerged and guided by the inheritance.
In summary, we will say that both phenomena: the biological and the social, occur in living
beings. That both tend to survival; that both are evolutionary, being therefore subject to a specific
development and progress; that both promote an optional symbiosis suitable for individual
purposes; and finally, that both are marked by an inheritance that imposes characters, traits, ideas or
circumstances that, in the strictly social, are given in the tradition.
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Fig. 4: PAU of the first nucleated cell
Figure 4 indicates how the formation of the first nucleated cell (eukaryotic) could be,
according to Hartman (1984). The scheme suggests that the eukaryotic nucleus, its main internal
organelle, derived from the endosymbiotic concurrence of: (1) A chronocyte (the cell,
evolutionarily, older and based on RNA) that as a host has the possibility of endocytosis (to
swallow other microorganisms), provides a signal receiving system and a factory of the nucleus to
be formed (transport of materials inside and outside of it). (2) Some archaea (unicellular
microorganism without a nucleus or internal organelles, 3500 million years old.) That as an
endosymbiont contributed with its metabolism and with its DNA; and (3) A bacterium (unicellular
microorganism without a nucleus and of antiquity similar to the previous one, but with the ability to
move) that as a second endosymbiont contributed its DNA, its reproductive apparatus and its
mobility.
Hartman (1992) suggests that the chronocyte (named for the Greek god Krónos) began
“swallowing” its evolutionary progeny (archaea and bacteria) and after many endosymbiotic events,
formed a nucleus. Then, it incorporated a mitochondrion (energy-producing organelle) and finally, a
chloroplast (organelle that contains chlorophyll and produces photosynthesis); thus, giving origin to
the animal and vegetal cells. Hartman and Fedorov (2002) show that the chronocyte was the one
that made possible the appearance of the nucleus, for its ability to "manufacture" a membrane
around the DNA contributed by the bacteria and, thus, isolate it from the cellular cytoplasm.
Once the nucleus was “manufactured,” it provided it with a mechanism for dividing the
chromosomes (DNA) and with it the mitotic reproduction. It also gave rise to the cytoskeleton, or
the three-dimensional network of proteins that provide internal support to cells, organizing their
structures and intervening in the phenomena of mobility and cell division. Within the cytoskeleton,
it gave rise to the centriole, the organelle responsible for cellular dynamics, both external (causing
the movement of cilia and flagella) and internal (cell division).
In the previous paragraphs, we have witnessed the formation of a “universal language” that
has been the support of life, as we know it today. This language, as we see in the previous figure, is
not only structured by the mere intervening elements but also by the function that each element
fulfills. The latter, in the end, is what provides life to the cell, as a whole. In other words, cellular
vitality depends not only on the “content” (RNA, DNA, proteins, etc.) of the elements but on the
“continent” that surrounds each of them, that is, their function (support, dynamics, metabolism,
reproduction, etc.). The binary codes that we have placed on each component of this nucleated cell,
according to the attached allocation table, allow us to identify them according to this pair of
characteristics. Thus, the archaea contribute to the metabolism (01). The swimming bacterium adds
their reproductive mechanism (10). Both are related in appearance; by the centriole (11), an element
formed to organize and regulate the explicit dynamics of the DNA of the two main endosymbionts.
Finally, the chronocyte (00), does not share any of the characteristics that identify its symbionts, but
preferably it is who, in a hidden way, reorganizes the intrinsic activity that makes life possible,
giving physical support (cytoskeleton and energy). All these codes, correctly founded, form a group
and therefore, a PAU.
Deliberately, we have associated to these codes, the generic elements that according to TL,
determine the foundation of subjectivity, which, without hesitation, are life itself, knowledge and
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language (Salatino, 2009, p.30). In this way, and invoking the metaphor by analogy, we could say
that the first REM that supports the existence of a “universal language” based on a PAU is defined.
This generic REM will be the “chronocyte,” which by a mechanism similar to “endosymbiosis,”
will incorporate other REMs that will leave a record of different aspects of subjective reality. In this
way, we will be able to create a “subjective nucleated cell” that will represent the germ of a specific
language within the natural human language.
The generic PAUs (six in total) are universal patterns that constitute the minimum subjective
expression. Without being an object, nor subject, integrated, they are equivalent to the first
nucleated cell and to which, abusing the neologisms, we will call: subjectivon. This virtual “cell,” in
some way, will be established as a “subjectivity constructor,” or what is the same, a generator of
subjective aspects, among them, as we have already seen, language.
It is decisive to understand the deep relationship that exists between identity and
subjectivity. As well as, to submit to rigorous analysis the old idea of an essential, innate and
perennial identity of a set of predetermined qualities (race, color, sex, social class, culture, etc.).
This will allow us to understand that identity is instead the result of a polycontextural interrelation,
from where a complex psycho-bio-socio-cultural framework gives rise to the unique phenomenon
of subjectivity. The subjectivon, which we will talk about later, is proposed like the universal mold
from where the basic subjective patterns arise, that are not other than those that will give sustenance
to a supposed “social DNA.”
The urlingua, unlike the conjectural “Ursprache of Tlön” of Borges (1998, p.13), with only
the syntax would determine the form (functional geometry) and govern the 'grammatical accidents'
of each natural language. The urlingua is specified in its structure by the real domain or respective
subjectivon, thus representing a 'way of seeing reality’. Although this approach could well be taken
as a kind of Whorfian relativism, we must clarify that what we are trying to reflect is the exact
opposite. Because we have a way of seeing reality, which is given by subjectivon which he touched
us luck, arises in consequence, a vernacular language adequate to express that reality.
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Figure 5 shows the complementary disposition of the six domains in which the urlingua is
distributed according to its syntax (syntactic order typology). These domains would be valid in
different ‘regions’ of subjective reality, and from there they would serve as a template, perhaps, for
a given proto-language.
Protolanguage may seem an inappropriate term since it means a reconstructed language or a
retrospective reconstruction of a language as the probable origin of a group of other languages. The
fact of using the reconstruction based on the coincidences of common features that do not mean
loans or innovations and of responding to the historical comparative method (genetic evolution),
allows in some way, even though in lateral form, to relate the domains proposed here and the six
proto-languages accepted. Without for that reason we losing sight of the fact that this comparative
classification that tries to find a common origin is not natural, far from it.
Many varied and important efforts have been attempted to classify existing languages. The
different investigative currents took paths sometimes convergent and sometimes opposed but
focused on two aspects fundamental: the typological and the genetic. The latter, not only about the
search for the common origin of all languages but also as regards biological genetics specifically.
The kinship that was tried to establish was not restricted to the linguistic structure but also extended
to the biological inheritance. Thus, among those who devoted themselves to this study, in at least
the last 200 years, we find philologists, anthropologists, geneticists, philosophers, linguists, etc.
Two milestones in the history of biological knowledge indelibly marked the genetic
approach of languages, on the one hand, Darwin's theory of evolution (1859) and on the other, the
discovery of DNA structure by Watson and Crick (1953). While adhering to this biological
knowledge, brought “new blood” to the old structure of linguistic study could not avoid the
excessive weight that assumed its influence, and that is still notorious in our days.
We will review very briefly the aspects on which the genetic approach is based. A
fundamental concept is that of kinship, which tells us that each language has evolved from another:
the mother tongue. That two sister languages share the same mother tongue and that two linguistic
forms in different languages come in the same way. All this gives rise to a ‘genealogical tree’ where
each node represents an immediate relationship of kinship (hierarchical order).
The historical-comparative method established that those languages that shared basic words
must have a common ancestral origin and that the DNA of languages, therefore, could be
represented by their elementary lexicon. The establishment of similarities in this primordial lexicon
made it possible to reconstruct proto-forms and proto-languages, both phonologically and morpho-
syntactically. This gives the feeling of having advanced a lot in the knowledge of the evolution of
language and languages, whose change in time can be evidenced in both the lexicon and in the
sounds, as well as in the grammatical aspects. Although not without accepting that the direction of
linguistic change is in most cases not very predictable since it cannot be isolated from speakers and
socio-cultural factors. The evident limitation of the historical-comparative and reconstructive
method does not make it useless, but it warns about the non-provenance of the excesses committed.
In an attempt not to get caught up in ultra-conservative, even racist positions, from which
they derived from the so-called social Darwinism that sought to justify social differences by
appealing to false biological categories, even the ‘perfect languages’ of Humboldt. The proposal
here presented is framed in a symbiotic conception of both classificatory currents, for that reason,
we call it genetic typology with the purpose of using in a coherent and fertile way the biological-
social homology.
We must emphasize that each of the six superficial triplets of the urlingua has its
corresponding profound triplet: its opposite, complementary and concurrent.
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Fig. 6: Universal autonomous patterns
The transcurssive logic (TL) explains the emergence of new forms (new languages) through
“mating” between two superficial triplets, thus giving something similar to a “fertilization.”
The production of a 'discontinuity' in the complex structure of the PAU, promotes the
functional split between the superficial (the phenomenal) and the deep (the essence). To the
separated deep triplet, we can assimilate it perfectly to a gamete because it possesses genetic
totipotenciality since when it join, by means of XOR or union of the differences, to another
complementary gamete chosen at random, it gives origin to a new PAU (emergency) that 'inherits'
all the characteristics of the group to which their ‘parents’ belong.
This process has its limitations and in a similar way to what happens in biological reality,
there are certain unions that are not viable because they give rise to subjects with such an anomaly
that prevents their ‘birth.’ Such limitations are presented in the impossibility of union of gametes of
different groups (Dx and Lv) and the union of identical gametes (e.g., OS and OS). Figure 7
considers what has been said in some detail.
In the previous figure, on the left side, the mating process is characterized, which is the one
that occurs between superficial patterns, and the process of fertilization, which is what happens
when deep patterns are related. As we can see, both are equivalent. On the right side of the figure,
we can see the same in the anomalous unions, between patterns of different variants (superficial
patterns) or between identical patterns (deep patterns).
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Given the similarity that we have already established between a subjectivon and a nucleated
cell, it is then legitimate to say that, like her, the subjectivon it has a nucleus (superficial) and a
gamete (profound).
Each subjectivon behaves like a universal mother tongue (UMT) that tends to be,
structurally speaking, of a specific form. This tendency is marked by order of its elements at a
superficial level, its syntax or the structure of its nucleus. Nevertheless, it admits multiple mutations
at the level of its other organelles, at a deep level, see Fig. 8. We must take into account, that
“mating” and therefore “fertilization” is only possible between subjectivons belonging to the same
variant; that is to say, or dextrorotatory or levogyrate, but not between variants.
In the specific case of a particular UMT that matches with a second UMT, belonging to the
same variant, it will give rise to changes in the central tendency that will explain why a UMT is as
lawful in a ‘region of reality’ as another that has different syntax. That is because part of their
“offspring” has inherited their genetic material (by 50%) and therefore, by the fact of belonging to
the same variant, shares characteristics with its “congeners.” Let's look at this last situation in detail
in Figure 9.
The previous figure tells us, in its left part, about the way in which a UMT grows and
develops by duplication, thus keeping its essential characteristics intact over time. On the right side
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shows us how mating with another UMT of the same variant allows generating a new UMT, which
will have in its “genetic material,” 50% of each of its “parents.”
In the case of duplication, nucleus and gamete are separated and by a mechanism of
complementary attraction they are linked to the missing part that originates in the environment, thus
giving rise to two identical subjectivons. In fecundation in exchange, they mate the gametes coming
from two UMTS of the same variant. That is, they are linked through transcussives operations: XOR
() and equivalence (≡), giving rise to a new subjectivon in which, its nucleus is the product of the
application of the superficial transcurssive operation (XOR) to the gametes of its parents while your
gamete is the result of applying the profound transcurssive operation (equivalence), respectively.
All the above explains quite well the case of UMTS that belong to the same variant, although
this is not the case when a UMT belongs to a different variant. We have already seen that when
UMTs are different, the union is incompatible. The solution is achieved by including the second
language as an organelle.
5. CONCLUSION
In this first part of the work, we have addressed from the relevant theories about the acquisition of
natural language to the existence of a possible universal language that serves as a "mold" for the
construction of the bases of what will be a natural language, diversified in thousands of vernacular
languages. To achieve the final task, after giving a structural characterization to the socio-cultural
system (one of the real systems that make up our subjectivity), metaphorically invoking
evolutionary biology, we generate a universal pattern that will allow us to reach our goal.
On the other hand, we have genetically characterized the different universal mother tongues,
which derive from an original language: urlingua. It was also possible to show how a new universal
mother tongue can be originated from two others, from the same or different variants.
Beyond that the projections from the biological that may seem excessive, they reaffirm the
strong biological and genetic, as well as socio-cultural, roots of our natural language. On the other
hand, they will allow us to risk a possible origin and evolution of the “order of words” and the “type
of words,” the two criteria most used to characterize, typologically, a specific language.
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APPENDIX
Universal autonomous pattern: (PAU) fundamental logical core of subjective reality. An
ontological-relational pattern that shows a complex structure, that is, its structural elements have a
triple relationship of opposition, complementarity, and concurrency (simultaneity). These
interrelationships occur between different contexts (or continents of fundamental elements): subject
(S), object (O), apparent transformation (V) and hidden transformation (). This disposition forms
two triads that constitute, in turn, two levels: 1) superficial level (SVO) that represents the
quantitative, and 2) deep level (OS) that accounts for the qualitative of a system.
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ABSTRACT
Retail sector is not sustainable although it is considered to be one of the biggest employment sectors
in Tanzania. This is due to established retail shops which end up being closed after short period of
time. The main objective of this study was to examine location as a competitive advantage on retail
convenience shopping. Specifically, to assess the influence of parking facilities on retail
convenience shopping, to determine the impact of accessibility on retail convenience shopping and
to delineate the influence of shop visibility on retail convenience shopping. Data was collected
through structured questionnaires which were distributed to 242 retail shop customers in
Kinondoni- Dar es Salaam region. Convenience sampling was used to select retail shops in
Kinondoni. Multiple linear regression was used to test the hypotheses. Findings of this study reveal
that parking facilities, accessibility to the shop and shop visibility have positive and significant
impact on retail convenience shopping at p > 0.001 significance level. Therefore, when choosing
where to locate a retail shop, retailers should consider these three factors in order to be competitive
in the market. We recommend future studies to focus on location and convenience shopping, as well
as large supermarkets in Zanzibar.
CITATION:
Wilbard, J.G., Mbilinyi, B.D., Maliva, N.S. and Mkwizu, K.H. (2018) “Is Location a competitive
advantage on retail convenience shopping?” Inter. J. Res. Methodol. Soc. Sci., Vol., 4, No. 2: pp.
15-26. (Apr. – Jun. 2018); ISSN: 2415-0371.
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1.0 INTRODUCTION
Location of retail shops has been vigorously researched during the past century (Kateryna, 2005;
Colomé & Serra, 2003; Craig & Ghost, 1983). Several key areas in the literature on the shop
location as a competitive advantage in convenience shopping have not been researched (Hernández
& Benniso, 2000; Lits, 2008; Karl, 2013). Previous studies on location and convenience shopping
have concentrated on examining different models and variables in choosing location of retail shops,
and the choice of retail store location based on retailers’ point of view. However, the literature on
location and retail convenience shopping based on customer’s view is missing. There are scant
studies on assessment of location and its impact on retail convenience shopping (Hernández &
Benniso, 2000; Lits, 2008; Karl, 2013). While Tanzania is moving towards industrialization,
entrepreneurs should be able to know what customer’s are looking for when they decide to shop in
retail stores. This paper poses the research question of which state that “is location a competitive
advantage on retail convenience shopping?”
Retail shops in Tanzania are considered to be one of the biggest employment sectors.
However, the sector is not sustainable due to established retail shops which end up being closed
after short period of time. According to Kotler (2005), economic activity will take root if there is
competitive advantage and niche that is hard to replicate elsewhere. Kotler added that if businesses
are to prosper, they must find a compelling competitive reason for locating in the area. A coherent
strategy for development starts with the fundamental economic principle on where the business
should be located. In a market economy, where one of the main driving forces are rivalry, the
choice of a location for retail and service firms in the broader context of a well-formulated
competitive strategy is crucially important. Business location is a unique factor which competitors
cannot imitate. Location can give a strong competitive advantage. Good location is the key element
for attracting customers to the outlet. A well located retail shop makes supply and distribution
easier. Retail business draws customers to a shop location; the site must be convenient to the
customer. It means that, location must be easily accessible and provide customers with a sense of
safety upon their arrival and exit. Location of the shop can be closer/on the way home or work
place. The issue of convenience is of great importance in today's consumers; a retail shop can
prosper or fail solely based on its location. While other marketing mix elements may be easily
changed in response to a changing environment, retail shop location represents long-term
investment that can be changed only at considerable cost. Therefore, a critical element of the
retailer's strategic plan is a location strategy that considers future changes in the environment
(Colomé & Serra, 2003).
According to Runciman et al. (2001), retailers compete by attempting to gain a competitive
advantage over their rivals. They do this in one of four ways. First, they can use pricing of their
products. Second, they can use geographic location whereby they select a more suitable site of the
market to locate in. Third, they can use product selection, differentiation or packaging. Finally, they
can differentiate themselves from their competition by offering better customer service. The
relative importance of these factors to each retailer varies. Runciman et al. (1998) argues that no
retailer competes based on only one of these factors; instead, they compete by combining a number
of these strategies. However, others argue that geographic location is the prime factor because
prices and product selection, differentiation or packaging, as well as customer service can all be
imitated by competitors, but it is difficult to assail the location of a competitor (Litz & Rajaguru,
2008). Similarly, Scarborough and Zimmerer (2003) attribute the failure of many good potential
retail firms to the inability of their owners to find a location that is compatible with the nature of the
business.
Convenience shopping has been one of the concerns of marketers for many years
(Parasuraman, Zeithaml & Berry, 1985; Reinartz, Dellaert, Krafft, Kumar & Varadarajan, 2011;
Clulow & Reimers, 2009). This is because it is one of the best tools for marketers to retain and
attract customers especially in the competitive environment (Prinsloo, 2016). Location, Price
competitiveness, extended shopping hours as well as the variety of the stock that is offered are
among the factors that customers look at for convenience of shopping in retail shops.
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well as legal restrictions. A store location usually requires a sizable financial investment and long
term commitment by the retailer (Grewal, Levy & Kumar, 2009).
Critical to our understanding of the Resource Based View theory of the firm is the definition
of resources, competitive advantage, and sustained competitive advantage. First, Barney (1991)
asserts that resources fall into three categories: physical-capital resources (e.g. a firm's plant,
equipment, and geographical location), human-capital resources (e.g. experience, judgment, and
intelligence of individuals), and organizational-capital resources (e.g. a firm's structure, planning,
controlling, and coordinating systems). Based on this view, location of retail shops are the
important element when the consumer is looking for convenience of shopping. Consumers consider
various factors in choosing location such as accessibility, parking area and visibility. The article
“Stability in Competition” by Working and Hotelling (1929) was one of the first to address the
issue of retail competition with respect to location. Working and Hotelling (1929) assumed a world
of two firms competing for customers in a linear market in which population distribution is even.
Both the firms and consumers behave rationally, and consumers would only shop at the location
that was the closest to them. At any time, each firm can have only one location, but firms do not
incur any cost by changing location (Phlips & Thisse, 1982; Ofori-Amoah, 2007). Under these
assumptions, showed how the two firms would alter their locations to achieve an advantage. Each
firm would locate on either end of a theoretical linear market. In order to gain an advantage, firms
would change location to gather more customers. In the end, they would reach a state of equilibrium
where both shops would locate close to each other in the center of the market. Working and
Hotelling (1929) also believed that firms would compete efficiently by selling the same products; he
called this the principle of minimum differentiation. This pioneering work led to the development of
spatial competition theory, which refers to the mechanism by which competing firms attempt to
capture the largest share of the market after choosing a position in geographic space. Levy and
Weitz (2012) argued that customers consider location in terms of parking facilities, accessibility of
the place and area which is visible among important things when choosing where to shop from.
2.1.2 Accessibility
Levy and Weitz (2004) defines accessibility as the ease with which a customer may get into and out
of a site. Accessibility analysis considers the primary trading area. To assess a site’s accessibility, a
retailer simultaneously evaluates several factors such as road patterns, road conditions and barriers.
In road patterns, primary trading areas needs major arteries or freeways so customers can travel
easily to the site. Road condition includes congestion and general state of repair of roads in the
primary trading area. According to Levy et al. (2012), one of the most important factors affecting
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retail shop sales is the number of vehicles and pedestrians that pass by the site (traffic flow). Thus,
retailers often use traffic count measures to asses a site’s attractiveness. Good traffic flow and
accessibility offers the one hundred percent type of location which in turn optimizes shop
performance. There are two types of traffic flow, namely pedestrian traffic and vehicle traffic.
Pedestrian Traffic: This is the number and type of people passing by; it is probably the most
important measure of locations and site’s value. However, the site with the highest pedestrian traffic
does not necessarily mean potential customers; retailers should be able to convert the traffic into
sales. According to Berman and Evans (1995) a proper pedestrian traffic count should encompass
these four elements: A separation of the count by age and gender - children under a certain age
should not be counted. A division of the count by time – this allows the study of peaks, low points
and changes in the gender of people passing by the hour. Pedestrian interviews – these enable
researchers to find out the proportion of potential shoppers. Spot analysis of shopping trips – these
allows observers to verify the stores visited. Vehicle Traffic: The quantity and characteristics of
vehicle traffic must be examined, especially by retailers appealing to customers who drive there.
Grocery stores, convenience stores and car washes are often examples of retailers that rely on heavy
vehicular traffic. Vehicle customers always avoid heavily congested areas and shop in areas where
driving time and driving difficulties are often minimized. However, in down town areas, closeness
to mass transportation is important, particularly for people who do not own cars and commute to
work. The availability of buses, taxis, commuters or any other kinds of public transit creates areas
that are at the hub of mass transportation network, therefore allowing people from all over a city to
shop there. Research has shown that with the increase in number of working women worldwide,
shopping time is fast becoming a scarce resource; as a result, many persons do their shopping on
their way back home from work, hence public transport ranks are becoming popular with retailers
as they provide an easy flow of potential customers. Only shop managers were interviewed.
2.1.3 Visibility
As defined by Levy et al. (2012) visibility refers to a site’s ability to be seen by pedestrian and
vehicular traffic. High visibility makes passersby aware that a store exists and is open. On the other
hand, placement in the location refers to a site’s relative position in the district or centre. A corner
location is often desirable since it is situated at the intersection of two streets and has “corner
influence”. Corner locations is often characterized by these advantages; greater pedestrian and
vehicular passersby due to converging traffic flows from two streets, increased show-window
display area, and less traffic congestion via the use of two or more entrances
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2.3 Hypotheses
This study considers parking facilities, accessibility and visibility to contribute towards retail
convenience shopping. When customers have parking space, retail shops are accessible and visible,
there is convenience of shopping in the retail shops. Therefore, independent variables in this study
are parking facilities, accessibility and visibility and retail convenience shopping being the
dependent variable. Retail convenience shopping is measured by shop products price, extended
shopping hours and availability of variety products. Therefore, it has been hypothesized that:
(i) Parking facilities have a positive influence on retail convenience shopping;
(ii) Accessibility has positive influence on retail convenience shopping; and
(iii) Visibility has a positive influence on retail convenience shopping.
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49% followed by college (35%), secondary school (12%) and primary school (4%) leavers. Middle
class earners 500,000-999,999 are the largest percentage (45%) of retail shoppers, followed by the
respondent earning 500,000 and below (26%) and 1,000,000 to 2,999,999 (23%). The respondents
earning 3,000,000 and above were the least in the group (6%).
Sex
Male 31
Female 69
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sampling adequacy of the items was tested using the Kaiser-Meyer-Olkin (KMO), which measures
the sampling adequacy (Kaiser, 1974). The results of KMO tests was 2 (212) = 1623.520, P<0.001
(Table 3), which indicates that the correlation matrix is significantly different from the identity
matrix where the variables would not correlate with each other, and the variables being appropriate
for factorization. The KMO index of 0.760 indicates that variables are good for factorial analysis.
This index is well above the minimum criterion of 0.6 (Field, 2013).
Bartlett’s measure tests the null hypothesis that the original correlation matrix is an identity
matrix, and shows that the test is sig 0.000, p < 0.001. A visual check on communalities noted that
all the values were around 0.5 and above as proposed by Hair and Lukas (2014). Table 3 presents
the Kaiser-Meyer-Olkin measure of sampling adequacy, calculated as 0.760, indicating that the
latent constructs can predict the variability in the response on the observed variables. Both tests
provide evidence that support factor analysis.
Exploratory factor analyses were performed for independent variables, particularly parking
facilities, accessibilities and visibilities, and retail convenience shopping as dependent variable
(Table 4). Exploratory factor analysis items that had cross-loadings and an Eigen value of lower
than 0.40 were dropped from further analyses (Field, 2013). Thereafter, the items under each
dimension were summated and the averaged with the latter used for subsequent inferential tests.
Table 5 below shows the value of individual variable and its relationship with retail
convenience shopping. The study found that location (parking facilities, accessibility and visibility)
has positive effect and significant impact on retail convenience shopping (b = 0.220, sig 0.000; b =
0.94, sig 0.000 and b=0.104 sig 0.001) respectively. R square indicates that location (parking
facilities, accessibility and visibility) contribute 88% on retail convenience shopping. Adjusted R
square indicate that even when the whole population would be taken into consideration still location
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would be contributing 85% in retail convenience shopping with F value of 48.001 which is
significant at 0.000. Durbin-Watson (a test for serial correlations between errors) indicates the value
of 2.004 showing that the residuals are uncorrelated which was supported by Field (2013); Durbin
and Watson (1951) as the best value.
5.0 CONCLUSION
This study assessed location as competitive advantage on retail convenience shopping. Three
hypotheses were drawn from location and convenience shopping literature. Convenience sampling
was used to select sample of retail shops while purposive sampling was used to select retail shops
which were located in the same area. Descriptively, this study finding indicates that, the middle age
(31-40 years) are the people who regularly do shopping for their families and that, in this context
women normally are the ones who are responsible for family caring and therefore are the ones who
do shopping. This implies that if a retailer would like to establish a retail shop, one would consider
the place where women could easily reach. In establishing a retail shop, a retailer should keep in
mind that the most buyers are the people of the middle income earners (500,000-999,999 Tshs
equivalent to 220-340 USD) who are degree holders and therefore, marketing mix should be
planned to reflect this group of people.
The result of multiple linear regression lead to non-rejection of three hypotheses indicating
retail convenience shopping to be influenced by independent variables. Such finding complement
with Levy et al.. (2012) which noted that good location may enable a retailer to succeed even if its
strategy mix is ordinary, and that, a poor location can be such liabilities that even the able retailer
may be unable to overcome it. Compared to Mendes and Themindo (2004) who looked at location
and retail convenience shopping on the retailers’ view and concentrated on the factors to consider
when making decision on the location of retail store, this study focuses on the location and retail
convenience shopping based on customers view. Considering the importance of customers in
determining the survival of businesses and that they are the ones who would make decision on
where to buy, it was very important to do this research. On the other hand, a retailer should bear in
mind that when selecting shop location, parking space should not be overlooked. This study
supports Levy and Weitz, (2004) in that, if there are no enough spaces or the spaces are too far from
the store, customers will be discouraged from patronizing the store. This study also indicates that
customers shop where there is accessibility to the stores, meaning that no car trafficking or
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congestion. Customers would like to save time and that if the shop located at the place with too
much traffic it would be wastage of time.
Customers also like to do shopping at the place where there is a proper pedestrian traffic.
Pedestrian traffic could affect shopping behavior of customers due to that the security of their staff
such as handbags and phones would be at risk. This is in line with Levy and Weitz (2004) in that
the number and type of people passing by the shop is probably the most important measure of
locations. Respondents indicate that retail shops near their work places and homes are likely to be
visited. Customers also like to shop where the shop is easily seen or easy to direct. If a shop is not
easily seen, then there is possibility for someone to get lost. This study shows that respondents tend
to shop where there is billboard and other signs. This is in line with Levy and Weitz (2012) in that
high visibility makes passersby aware that a store exists and is open.
STUDY LIMITATION
This study was conducted in just one district of Dar es Salaam region being Kinondoni. It was done
in retail shops which indicate that only specific (low and medium class earners) group of people
would like to shop within. Therefore, this study opens room for further studies. One would expand
the study by looking at location and convenience shopping in different places, such as Zanzibar
where culture is a bit different due to the facts that men are the ones who do shopping and therefore
may yield different results. The same study could be conducted in large supermarkets where all kind
of buyers’ shop so as to taste their shopping location preferences.
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ABSTRACT
The purpose of this paper is to examine the quality of message and level of knowledge of TV
programs amongst first time and repeat visitors by domestic tourists to national parks. The objective
of this article is to analyze the relationship between content and information about national parks
amongst first time and repeat visitors by domestic tourists to national parks. This study was
conducted in Southern National Parks of Tanzania. Written survey was used where quantitative data
were collected. Semi-structured questionnaires were handed to 420 respondents and subjected to
descriptive statistics and univariate analysis. The findings showed that there is a statistically
significant relationship between content and information about national parks amongst first time
and repeat visitors by domestic tourists to national parks F (22.563) and (p = 0.000). The outcome
of this paper implies that tourism stakeholders can improve promotion of domestic tourism through
content and information about national parks.
CITATION:
Mkwizu, K. H., and Mhache, E.P. (2018). “Quality of Message and Knowledge of TV programs
amongst First Time and Repeat Visitors by Domestic Tourists to National Parks.” Inter. J. Res.
Methodol. Soc. Sci., Vol., 4, No. 2: pp. 27-33. (Apr. – Jun. 2018); ISSN: 2415-0371.
1. INTRODUCTION
Domestic tourists to national parks are documented in various scholarly articles around the world.
Recent studies in the tourism field have researched domestic tourists on issues related to television
advertising, social media, millennials and tourist gaze (Mkwizu, 2016a, 2016b, 2017; Mkwizu &
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Matama, 2017a, 2017b; Stone & Nyaupane (2017). The growth of domestic tourists is revealed in
tourism studies. For example, the increase of domestic tourists is noted in India, and that domestic
tourists are known as the backbone of Indian tourism (Nair & Ramachandran, 2016; Dwarka, 2017).
Furthermore, the article by Nair and Ramachandran (2016) argued that climate and destination
management are determinants of tourists destination by domestic tourists in India. While other
studies in tourism indicated growth in domestic tourists, another study in China analyzed factors of
non-participation in the domestic tourism (Li, Meng & Zhang, 2016). The study concluded that
non-participation of domestic tourism is influenced by discouraging factors, such as low internal
motivation and attitudes, age for under 25 years old and over 55 years old, less educated, less
healthy with small child or children, lower income and constraints in leisure time (Li et al., 2016).
Subsequently Wahid, Aliman, Hashim and Harun (2016) found that there were 38.8% first time
visitors and repeat visitors (61.2%) to Langkawi Island in Malaysia, and that first time visitors
stayed shorter compared to repeat visitors.
In Africa, a research conducted in Botswana revealed that the number of domestic visitors to
national parks is low due to factors such as the local tourist gaze (Stone & Nyaupane, 2017). One of
the destinations in Sub-Saharan Africa, that is rich in wildlife resources and has renowned national
parks, is Tanzania (Mkumbo, 2017). In Kenya, Ogutu, Mugo, Kibe and Kariuki (2017) conducted a
research on the contribution of internet marketing towards promotion of domestic tourism. The
study was driven by a decline of traditional source markets and the need to focus on domestic
tourists. Ogutu et al (2017) found that social media and websites are effective channels to promote
domestic tourism in Kenya. It is evident that these previous studies in Africa (Mkumbo, 2017;
Ogutu et al., 2017; Stone & Nyaupane, 2017) did not consider the quality of message and
knowledge of TV programs from the perspective of domestic tourists.
The study by Mkwizu (2017) noted that domestic tourists contributed 40.5% of total visitors
to national parks in Tanzania. Similarly, there are tourism studies in Tanzania of which many have
concentrated on investigating aspects of successful factors of hotel management, and social media
for co-creation of tourists in safari destinations (Mbise, 2017; Mkumbo, 2017). For instance, the
study by Mbise (2017) pointed out that past studies focused on value based outcomes rather than
what drives the implementation of environment management. Despite various studies in tourism for
Tanzania, there is scant literature on quality of message and knowledge of TV programs amongst
first time and repeat visitors by domestic tourists to national parks. The main purpose of this study
is to examine quality of message and knowledge of TV programs amongst first time and repeat
visitors by domestic tourists to national parks. The objective of this paper is to analyze the
relationship between content and information about national parks amongst first time and repeat
visitors to national parks.
2. LITERATURE REVIEW
2.1 Conceptual Definitions
2.1.1. Quality of Message
The concept of quality of message consists of uniqueness and importance of message (Payne,
Doran, Samuel & Pharo, 2012). On the other hand, Beriain (2013) refers to quality of message as
content. In this study, quality of message is content shown on TV programs. The study by Brown
(2010) looked at quality of message from the perspective of uniqueness. In addition, Brown (2010)
expressed uniqueness of message using the word imaginative while importance of message is
considered as valuable and not easy to forget.
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information about national parks (37%). The descriptive statistics findings for the five statements
of information about national parks showed that most of the respondents agreed that TV
advertising provide information about national parks (45.3%), TV advertising of tourists
attractions build interest in learning domestic tourism (45.5%), TV advertising provide
information on activities at the national parks (46.5%), TV advertising provide information on
wildlife in national parks (45.8%), and TV advertising provide information on location and
transport methods to national parks (38.3%). The results suggests that majority of respondents
agreed that content and information about national parks to be informative.
The percentage findings of content and information about national parks in this study are
not in line with the study by Hossain and Ahmed (2012). The research by Hossain and Ahmed
(2012) conducted in Bangladesh showed that 71.74% of respondents found product information on
TV advertising not satisfactory. The differences of results between these two studies is due to the
fact that first time visitors by domestic tourists were the majority; therefore, most respondents
found content to be informative and they agreed that there is information about national parks,
such as activities and wildlife in national parks.
The purpose of using Univariate analysis for this study is to test whether there is a
statistically significant relationship between the independent variable (content) and the dependent
variable (information about national parks) amongst first time and repeat visitors by domestic
tourists to national parks. The findings in Table 1 for Univariate analysis test show that the
relationship between content and information about national parks amongst first time and repeat
visitors by domestic tourists to national parks is statistically significant (p = 0.000). Further
findings in Table 1 show the mean variance (11.336) with F (22.563), and this suggest that the F
ratio (22.563) observed between groups variance (11.336) is 22 times greater in between groups
than within groups (0.502). We conclude that the relationship between content and information
about national parks amongst first time and repeat visitors by domestic tourists to national parks is
statistically significant. This finding supports the Economics of Information Theory (EIT).
Table 1: Univariate analysis test for content and information about national parks. Dependent
variable is information about national parks.
Mean Square F Sig.
Corrected Model 11.336 22.563 0.000
Intercept 1397.206 2780.921 0.000
content 11.336 22.563 0.000
Error 0.502
Total
Corrected Total
Source: Field data (2018)
The results of this study differ from Kruger et al (2014) because while differences were
noted between first time and repeat visitors to Kruger National Park, the findings of this study
showed a statistically significant relationship between content and information about national parks
for first time and repeat visitors by domestic tourists to national parks. Further implications of this
study is that the variables of content and information about national parks can be used in examining
quality of message and knowledge of TV programs amongst first time and repeat visitors by
domestic tourists.
On another note, the results of this paper are different from a study by Canavan (2012)
carried out in the UK. The variation of results is due to tourists’ engagement in domestic tourism
which was mostly by entertaining family and friends from the study by Canavan (2012) while in
this current study, results suggests a significant relationship between content and information about
national parks amongst first time and repeat visitors by domestic tourists to national parks.
Similarly, results of this study are not consistent with the research by Yapparova (2013)
done in Finland which showed that a majority of information such as road maps and leisure
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activities by Russian tourists is through internet not TV and thus internet be used as a media for
local tourism. The variations of results in the research by Yapparova (2013) and this study is that,
not only are these studies conducted in different countries but the content and information about
national parks amongst first time and repeat visitors by domestic tourists to national parks was
statistically significant in this study. Furthermore, the information about national parks includes
activities and wildlife in national parks as well as location and transport methods to national parks.
5. CONCLUSION
The main purpose of this study was to examine the quality of message and knowledge of TV
programs amongst first time and repeat visitors by domestic tourists to national parks. The objective
was to analyze the relationship between content and information about national parks amongst first
time and repeat visitors by domestic tourists to national parks. The findings revealed that the
relationship between content and information about national parks for first time and repeat visitors
by domestic tourists to national parks is statistically significant. This implies that information about
national parks amongst first time and repeat visitors by domestic tourists to national parks is
dependent on content.
The statistically significant results support the Economics of Information Theory in that
knowledge of TV programs convey information about national parks amongst first time and repeat
visitors by domestic tourists to national parks who are dependent on content in terms of “TV
advertising is informative”, “TV advertising made me decide to visit national parks”, “Confident in
using information on TV advertising to visit national parks”, and “Comfortable to use address or
phone number seen in a TV advertising for further information about national parks”. In addition,
the outcome of this paper implies that stakeholders and policy makers can improve promotion of
domestic tourism through content and information about national parks.
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Mkumbo, P. (2017). The use of social media as tools for co-creation of tourist experiences in safari
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ABSTRACT
Water is one of the most critically stressed natural resources considering its expanding uses for
economic activities, household demand and widespread misuses and mismanagement against a
declining supply. The phenomenon of climate change, with clear changes in the trends and patterns
of rainfall and temperature and their seasonal variability, has posed an additional blow to the severity
of the water supply. In this context, water poverty index is considered to be useful for designing an
integrated water management system for any country against climate change. It is a composite index
that combines five water related components i.e. resource, access, capacity, use and environment
with its seventeen sub-components to ensure that all the major water issues involving physical,
social, economic and environmental aspects are included. The WPI score ranges between 0 and 100;
a low score indicates water poverty and a high score indicates good water provision. For the present
study, both water scarcity and climatic vulnerability have been considered and a total of sixteen low
income and climatically vulnerable countries have been considered: Bangladesh, Ethiopia, Haiti,
India, Indonesia, Kenya, Malawi, Mali, Mozambique, Nepal, Nigeria, Pakistan, Sri Lanka, Sudan,
Vietnam and Zimbabwe. The findings suggest that Indonesia scores the highest (61.34) and Sudan
the lowest (24.65) among all the countries, while Bangladesh’s position (45.60) is fairly mild, which
signifies that the country is not in a good position and there is a need to think about water
management seriously against the looming climate change and water stress.
Key words: Water poverty index, Vulnerability, Developing countries, Water management.
CITATION:
Chattapadhya, S. and Islam, N. (2018). “An Assessment of Water Poverty Indices in the Context of
Climate Change: A Study of Selected Climate Vulnerable Developing Countries.” Inter. J. Res.
Methodol. Soc. Sci., Vol., 4, No. 2: pp. 34-48. (Apr. – Jun. 2018); ISSN: 2415-0371.
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1.0 INTRODUCTION
Water is important for human use, it ensures a country’s food security and other sectoral uses like
for agriculture and industry, it is important for maintaining a country’s economy, ecology and social
progress is equally critical. Many countries in the world have much water resources available, but
do not have the capacity to use them properly although there is high demand. Similarly, there are
countries which have limited stock, but could use it more efficiently. In between, there are countries
that either do not have the luxury of misusing their water resources because of poor stock of water
or are not technically or capable to tap the maximum benefits from their water resources. Most
vulnerable and water poor countries are developing and even many with abundant stock of water
just do not have the capacity to make them useful for their economies. Their economic progress and
prosperity are subject to water use efficiency in many respects. Moreover, most water vulnerable
developing countries are also vulnerable to global warming-led climate change. Climate change for
these countries bars their economic progress, and may pose a serious threat to make the situation
worse in days to come. It is important to understand, assess and evaluate their water resource
availability, build capacity in using them properly and level of threats in the form of water
pollution, to suggest a way-out and propose some effective water management mechanisms that are
useful for tackling water crisis with changes in climatic conditions in the years to come. In this
context, water poverty index, a recently developed index, is considered to be useful for designing an
integrated water management system for any country against climate change.
There is not enough study that linked climatically vulnerable developing economies with
their WPIs to improve water management strategy for their economies in face of the climatic wrath
in the years to come. The current study aims to fill the gap and serves to generate adequate policy
inputs for better water management. Its main purpose is more of a policy-oriented and is expected
to address narrowly a country’s internal or regional water dynamics. It is mainly designed to
improve the situation for people facing poor water endowments and poor adaptive capacity.
The study has the following objectives: (i) To assess water availability and the anticipated
crisis in the context of climate change for the selected developing countries; (ii) To construct water
poverty indices for the selected vulnerable developing countries; and (iii) Suggest policy measures
for better water resource management strategies against the climate change.
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household consumption, besides agricultural and expanding industrial water demands, can be a
mechanism for pro-poor growth and development.
Prudhomme (2002) showed the applicability of WPI by incorporating the climate change
through using GCM method. The paper stated that the world is now going through extreme events
of climate change, such as long-lasting droughts and very severe flooding. Four indicators of WPI
which used in this study are considered to be directly linked to climate. It is observed that access to
water is affected due to a change in temperature conditions, while the ‘use’ and ‘environment’
components would also be affected by temperature. It is predicted by the authors that regions with
high increase in their demographic characteristics, such as South Asia, would expect to face
vulnerability in its stock of fresh-water resources as the climate is becoming more extreme for the
region.
3.0 METHODOLOGY
3.1 Water Poverty Index and its Components
The WPI is a number between 0 and 100 where a low score indicates water poverty and a high
score indicates good water provision. Traditional water scarcity assessment focuses only on the
vulnerability of communities and physical water scarcity; WPI attempts to combine social,
economic and environmental aspects of water scarcity.
Water poverty index is a composite index comprising of availability, access, capacity, use
and environmental components of water sector in a country or region. Every component of WPI
consists of some sub indicators. In this paper, seventeen subcomponents are used to calculate WPI.
The list of sub indicators are given in (Table 2) in annex.
X i X min
X ij (1)
X max X min
where, Xi= original values for country I, Xmax = highest value the country concerned, and
Xmin= lowest value of the country concerned
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N
wi X i
WPI i 1 (2)
N
wi
i 1
where Xi = component of WPI structure for any location, and Wi = weight applied to that
component.
The following equation provides the weight of each component of WPI. There are many
ways of combining the data to calculate WPI. However, this process is the most used one because
of its simplicity and straight forwardness. The weighted average for the sub-components of WPI is
expressed as:
Wr R Wa A WcC WuU We E
WPI (3)
Wr Wa Wc Wu We
where, WPI = Water Poverty Index score of a particular location, R = Resources component, A =
Access component, C = Capacity component, U = Use component, E = Environment component,
and w = weighting factor for each component. Then components are standardized to fall in the
range 0 to 100 by multiplying each of the five components with 20 and then summed up to obtain
the final index score.
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data for 2006, Nepal for 2011 and Zimbabwe for 2003 have been taken from the World
Development Indicators, 2014. For Haiti data on net primary school enrolment (average of 2008 to
2012) has been taken from UNICEF and for Sudan from the UNDP. Information on percentage of
water pollution for Ethiopia, Haiti and Sudan has been taken from year 2013. The sources of data
are provided in (Table 4) in annex.
In case of water access, Sri Lanka scores 19.74 out of 20 and takes the first place. On the
other hand, Mozambique’s score of a 0.89 is the lowest score in case of water access among the
sixteen countries. That means access to clean water and sanitation services are comparatively high
in Sri Lanka and very low in Mozambique. For capacity, Indonesia scores 10.95, while Ethiopia
scores 3.54. These two are the highest and the lowest scores in case of water capacity. The fourth
component of WPI is water use and it consists of water withdrawal for the purpose of agriculture,
industry and domestic uses. Nigeria scores the highest at 13.33, while Nepal’s score of 6.88. In
case of environment, Indonesia scores 14.70 taking the highest place, whereas Mali scores 4.96 and
taking the lowest place.
4.2 WPI Scores Analysis for South Asian Countries and African Countries
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The following two graphs (Fig. 2) show the WPI scores (on the basis of five components- resource,
access, capacity, use and environment) for five South Asian countries and eight African countries.
WPI for other three countries are shown in Fig. 2 in annex.
Management of water resources and ecosystems assumes high significance and are necessary for
any country’s long lasting economic growth. Bangladesh, India, and Sri Lanka are in their initial
stage of economic growth; environmental pollutions (water and air pollution) are expected to be
rampant and common. Sri Lanka scored the lowest (5.25) and India the highest (9.11) in case of
water environment i.e. water pollution. In the study conducted by Lawrence, et.al (2002), in the
environment component, Bangladesh scored 9, India 9.5, Nepal 11.8, Pakistan 11.5 and Sri Lanka
10.8. Thus, the water environment of these countries might have been degraded if compared to the
2002 standard. These countries have to go a long way to achieve proper management of their water
resources, prevent water pollution and water stress for protecting the environment and their
ecosystems.
If the scores estimated for the African countries are analyzed, a different picture emerges. The
overall WPI score by Ethiopia was 26.01, Kenya 31.43, Malawi 36.11, Mali 33.93, Mozambique
38.77, Nigeria 37.62, Sudan 24.65 and Zimbabwe 39.11. They are mostly the lowest scorers among
all the selected countries for the current study. Resource is the first component of WPI. Ethiopia
scored 6.86, Kenya 0.52, Malawi 1.18, Mali 8.76, Mozambique 10.78, Nigeria 1.98, Sudan 3.43 and
Zimbabwe 1.53 in resource. These scores represent that these countries are geographically
disadvantaged in water resources. In resource, Ethiopia scored 6.6, Kenya 4.9, Malawi 6.4, Mali
9.8, Mozambique 10, Nigeria 7.4, Sudan 7.9 and Zimbabwe 6.1 in the year 2002 in the study by
Lawrence et al, (2002). Though factors like time period, considered number of countries and
variables are different for the two studies, it can also be assumed that water resources in the African
states have been shrinking rapidly due to rapid consumption, misuse, pollution, climate change and
water related politics.
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Bangladesh, Indonesia, Nepal and Zimbabwe has declined significantly than other countries. Within
4 years, the scores lower from 47.18 to 39.77 for Bangladesh, 60.02 to 50.87 for Indonesia, 48.53 to
41.49 for Nepal and 41.19 to 34.63 for Zimbabwe. Here, Sri Lanka is an extraordinary example that
maintains its score upward from 46.68 to 48.17 for their efficient water management policy. Other
African countries, such as Sudan, Nigeria, Mali to lose WPI scores due to lack of managing their
water resources. Figure 3 shows a comparative scenario of WPI scores shifting from 2014 to 2018.
The study tried to look at the underlying causes of this score deviation and found that the
selected countries scored very poor in ‘Environment’ component. The ‘Environment’ component
consists of five sub components namely ‘water quality’, ‘water stress’, ‘environmental regulation
and management’, ‘informational capacity’ and ‘biodiversity based on threatened species’. A low
score in ‘Environment’ component implies that the country has less capacity to control water
pollution and to maintain biodiversity through environmental regulation.
Figure 4 shows a comparative picture of ‘Environment’ component from 2014 to 2018.
Bangladesh scores 9.52 in 2014 and 2.11 in 2018. Indonesia scores 13.39 in 2014 and 4.23 in 2018.
Zimbabwe scores 10.67 in 2014 and 4.10 in 2018. In spite of straggling with low water resource,
domestic wars and other socio economic issues, Mozambique, Mali and Sudan scored better in 2018
than other countries. South Asian countries such as Bangladesh, India, Nepal and Pakistan are the
lowest scorer consecutively 2.11, 2.05, 2.60 and 2.66 in 2018.
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4.5 Climate Change induced Water Shortage on Agriculture and Rural Livelihoods
When fresh-water flow is reduced, it hampers agricultural activities and life and livelihoods of a
vast majority of the people in a country where a large percentage of its people live on agriculture
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and rural activities. Thus, with climate change, agriculture, fisheries and livestock may be hampered
due to water scarcity.
(b) Considering most of these climatic and water vulnerable countries are economically weak in
addressing these concerns, they should initiate appropritae adaptation and efficent
management measures, the impacts are expected to be quite clear;
(c) Among the listed countries, where it is found that even after having quite good amount of
water resources, their ‘capacity’ to use them efficiently are poor. This indicates that if the
required capacity is not strengthened these countries may face severe water crisis;
(d) Capacity building for effective water use is equally important because good capacity helps
to make the ‘access’ and ‘environment’ scores to push up into a higher level, even if a
country has a relatively low score in‘resource’.
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(e) Low values of ‘enviroment’ component for most of the selected countries, except for
Indonesia, in their WPIs indicates that these countries do hardly bother about maintaining
an environmental quality of available water resources, which makes quality of the already
stressed water resources in these countries worse. This indicates that there is a need for
initiating a widespread awareness building initiative and States should consider investing
higher amount of resources for the management of water resources in these countries as their
growth and development and human well-being depend much on better water management
in the face of climate change.
Development of sectoral water use guidelines: This may help in better water use and check
water pollution and water being misused.
Capacity development for surface water use: Surface water use efficiency is another key area,
which needs to be given high attention.
More investment in water resource management: Most of the states considered for the study
should divert more resources for developing water management capacities in a more regorous
manner.
International funds for water management and emphasis on solution of transboundary water
conflicts: An important area of intervention by international communities is in the form of
extending resources and technologies to these countries as climate funds and ensure quicker
solution for water conflicts through international arbitrations.
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APPENDIX
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Table 1: Agricultural profile of selected countries
Country Cultivable land (%) Contribution of Population engaged in
(2012) agriculture sector to agriculture (%) (2009)
GDP (%) (2012)
Bangladesh 70.1 18 48
Ethiopia 36.5 49 79
Haiti 64.2 - -
India 60.3 18 56
Indonesia 31.2 15 44
Kenya 48.2 30 61
Malawi 60.8 29 -
Mali 34.1 42 66
Mozambique 63.5 30 81
Nepal 28.7 36 66
Nigeria 79.1 22 45
Pakistan 35.1 24 43
Sri Lanka 42.9 11 31
Sudan 47.4 28 -
Vietnam 35.0 20 52
Zimbabwe 41.9 13 65
Source: World Development Indicators, 2014
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4.Informational capacity 5. Number of threatened species
5.Biodiversity based on threatened
species
Source: Lawrence, et al. 2002
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Percentage of drinking water 2014 Nation master, 2014
pollution
Number of threatened species 2013 World Development Indicators, 2014
Source: Author’s compilation
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ABSTRACT
The purpose of this paper is to provide analyses of the effects of investing in human capital at the
national and firm levels. The analysis of firm level focuses on labor productivity as the indicator for
returns on investing in human capital. The scope of this paper is confined to one research question:
“Under what circumstance should a firm invest in human capital?” Using per capita GDP as output
and minimum wage as input, the national level analysis serves as a macroeconomic context for firm
level study of productivity. For firm level analysis, revenue and cost of good sold were used to
determine the level of productivity. Secondary data from the IMF was used for national productivity
analysis. Financial reports from Stock Exchange of Thailand for the years 2014, 2015 and 2016
were used for firm level analysis. Thirty listed companies were randomly selected from 100
companies in the SET100 index. The findings show that the national productivity and efficiency
levels are higher than those of the firms. Thailand has a national productivity level of 1.85 0.08
and labor efficiency of 0.85 0.08 while the sample firms show a mean productivity of 1.46 0.39
and labor efficiency: 0.46 0.39 . The difference between the national and firm levels may be due
to multiplicative effect. The firm’s labor productivity and efficiency is significantly lower than the
national level, p 0.003 .
CITATION:
Louangrath, P.I. (2018). “Productivity Effect from Investing in Human Capital - Part 1 of 2.” Inter.
J. Res. Methodol. Soc. Sci., Vol., 4, No. 2: pp. 49-63. (Apr. – Jun. 2018); ISSN: 2415-0371.
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1.0 INTRODUCTION
This research is presented in 2 parts. This paper represents part 1 of 2 parts. In part 1, we identified
the productivity at the national and firm levels. In part 2, we will examine the impact of training on
wage bill and productivity in detailed. Throughout this paper, we assumed that firms train their
employees uniformly without differentiating skill levels.
One of the country’s macroeconomic objectives is to increase the national output as
measured by the annual Gross Domestic Product (GDP). At the national level, the economy
demands a productive workforce. At the firm level, companies demand productive workers.
Productive workforce or productive workers refers to the level of productivity. Productivity is
defined as the ratio of output to input. The productivity level of all workers in a firm represents the
firm’s productivity. The productivity of all firms represents the productivity in the industry or
sector. Likewise, the productivity of all sectors represents the productivity of the economy.
At the national level, we are using Thailand 4.0 as a proxy for our discussion. Thailand 4.0
is an economic development policy aiming to achieve economic prosperity, social well-being,
human values and environmental protection. In order to achieve these goal the policy calls for the
raising of competitiveness in four main sectors. In the agricultural sector, Thailand 4.0 calls for the
transformation of traditional farming to “smart farming.” Traditional SMEs will be transformed into
“smart SMEs.” Where the economy had long been trapped in low value services, Thailand 4.0
wants the country to produce “high value services.” Lastly, unskilled labor will be transformed into
“skilled labor.” In this paper, we are focusing on the labor element of Thailand 4.0 as part of the
discussion of investing in human capital.
At the firm level we attempt to answer a basic question: “whether investing in human
capital leads to increase productivity?” This paper argues that investing in human capital leads to
an increase in productivity only among skilled workforce. For unskilled workers, investing in
human capital, in a form of training and education, leads to insignificant increase in productivity at
best; at worst, it is an economic waste. We qualified this assertion by applying it to private firms. In
the case of government-back retraining and retooling of workers to prevent unemployment or
worker’s dislocation, we make no assessment as it is beyond the scope of this paper. This paper
provides proof of these two points by analyzing the impact of training on productivity at firm level;
we extend the conclusion to the national economy by inference. Thailand 4.0 economic
development policy of Thailand is used as proxy to carry the analysis and discussion for country
level analysis. For firm level analysis, 30 companies from Thailand’s SET100 index were randomly
selected for case studies.
2.0 LITERATURE
This paper discusses investing in human capital in the context of economic development. From this
macro-level analysis, we can trace its implementation to the firm level. In order to appreciate the
role and importance of investing in human capital, it is imperative to see it in the context of
economic development model. By looking at the role of human capital from the perspective of a
national economy, one could understand its role better at a firm level. The link between the national
economy and firm operation is one which we commonly discuss as internal and external factors
analysis. The literature review is comprised of two parts. Part 1 (sec. 2.1) examines the origin of
human capital as an economic indicator for development. Part 2 (sec. 2.2) looks at human capital in
a form of skills in employees and its implication on firm productivity.
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labor and capital; and (ii) the elasticity of substitution must be asymptotically equal to one. The
model is formally given by:
where t = time period, = elasticity of output with respect to capital where the range is 0 1 ;
Y (t ) = total production at period t ; A = labor augmented technology or “knowledge”; and AL =
effective labor (Solow, 1956). The model assumes that all factors are employed with initial
condition of A(0) , K (0) and L(0) . Labor and technology are growth at a rate of:
The number of effective labor is defined as A(t ) L(t ) with a growth rate of ( n g ) . The
stock of capital depreciates at a constant rate of . Only a fraction of the output is consumed:
cY (t) where 0 c 1 . What is left from consumption is saved. The saved share of the output is
s 1 c which is used for investment. Thus, the capital stock at a given period t is given as:
Kˆ (t ) sY (t ) K (t ) (4)
dK (t )
where Kˆ or the change in capital stock with respect to time. Since the production function
dt
Y ( K , A, L) has a constant return to scale (Gelles and Douglas, 1996), it can be written as output for
effective unit of labor, thus:
Y (t )
y (t ) k (t )a (5)
A(t ) L(t )
where k = capital intensity or capital stock per unit of labor. The long-run pattern is given by the
Solow-Swan model:
Kˆ (t ) sK (t ) ( n g ) K(t ) (6)
where sK (t ) = sY (t ) which is the actual investment per unit of effective labor. The fraction s of
the output per unit of effective labor y (t ) that is saved and invested; ( n g ) = break-even
investment or the amount of investment that must be invested to prevent K from falling.
Equation 6 implies that K (t ) converges to steady-state value of K * defined by:
sK (t ) ( n g ) K (t ) . At the steady-state, there is no increase or decrease of capital intensity:
1
s 1
K* (7)
n g
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K (t )
progress. Since k (t )1 a at equilibrium K * , the rate of change of capital with respect to
Y (t )
K (t ) s
output is . At equilibrium, capital/output rate depends on savings, growth, and
Y (t ) n g
depreciation rates. Solow-Swan allows us to track the effect of the economic growth from changes
in technology, capital and labor (Haines and Nawaz, 2006). Under Solow-Swan model, the
marginal product of capital in rich and poor countries is the same (Caselli and Feyrer, 2007).
Therefore, poor countries are poor because of low productivity. This low productivity may be
explained by the low level of human capital (Lucas, 1990).
The Solow-Swan model has been modified by Mankiw-Romer-Weil by adding human
capital to the equation (Mankiw et al., 1992):
where H (t ) is the stock of human capital which, like physical capital, depreciates over time at a
rate of . The savings in investment in physical and human capital is: S sK sH . The dynamic
equations are given by:
k sK k h ( n g )k (9)
h sH k h ( n g )h (10)
1
s1 S 1
k* K H (11)
n g
1
s S1 1
s* K H (12)
n g
It has been shown that the effect of human capital is greater at the national level as indicated
by economic growth than it is on a micro-level as measured by worker’s salary (Klenow and
Andres, 1997). It is true that when firm trains its employees, the effect of such training does not
always translate into an increase in revenue. This is particularly true when the employee leaves the
current firm to join another. This lateral transfer results the absorption of skilled worker by one firm
at the expense of another, who invested in the training of that worker. However, at the national
level, the increase in skills of the workforce contributes to the aggregate output. This aggregate
effect is consistent with Solow-Swan model. Thus, human capital and technology had multiplicative
effect on production (Breton, 2013). Therefore, even if the effect of human capital ( ) does not
directly cause the training firm’s output to increase, its indirect effect to increase the national output
in the country is worth investing in human capital.
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Y (t )
H (t )
K (t ) A(t ) L(t )1
From (14, infra), the labor aggregate term may be written as:
Yit
Lˆit L
Ait Kit k
The ratio of Lˆit L : H (t ) will become our link from the firm level to the national level, and vice
versa. As we examine Lˆit L , we will look at the impact of training on labor productivity at a firm
level.
3.0 DATA
The data used in this research comes from various secondary sources. From the IMF’s annual report
on World Economic Outlook 2017, we extracted macro-economic data for the ASEAN country
(IMF, 2017). While Thailand is used as a proxy country, we used ASEAN’s 10 economies as a
cohort in order to examine Thailand’s economic data with a group benchmark. Additional data was
extracted from the ADB’s annual report on sustainable development (ADB, 2017). This
macroeconomic data came from a period of 10 years spanning from 2008 to 2017.
At the national level, we used the annual GDP as indicator for the national output. The
minimum wage was used as input cost. At the firm level, we used the firm’s income statement as
the basic document to provide us with the proxy data. There are 100 firms listed in the Stock
Exchange of Thailand (SET), we randomly select 30 companies to use as proxy for the firm level
analysis. The firm data used consists of sales and cost of good sold. Sales represent the firm’s
output. COGS represent the firm’s input where direct labor is part of COGS. Since the data is a
secondary data taken from the company Fact Sheet at www.setrrade.com, we have no way of
extracting direct labor cost from COGS; thus the entire amount of COGS is used.
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4.0 METHODOLOGY
The methodological approach of this paper follows two key prior publications by Bello et al. (2011)
and Konings and Stijn (2010). Bello et al. decomposes the per capita GDP in order to obtain labor
productivity per worker. We extend this per worker analysis through Konings and Stijn’s work on
the impact of working training on the firm and worker’s salary.
Y Y E
(14)
P nE p
n
where Y / P = per capita GDP per labor hour (labor productivity), E / P = employment of
population ratio, and n = number of hours per week.
The labor productivity (GDP per hour) may be decomposed into its components in the
Cobb-Douglas production function by:
1 a
Y AK a hEn (15)
where A = factor of productivity, K = physical capital, and h = human capital per worker. Thus, the
GDP per hour may be obtained by using the Klenow-Rodriguez-Claire (1997) approach:
1 a
K
A1 a 1 a h
Y
(16)
nE Y
In Bello et. al., the study involved the comparison of Venezuela and the US, in this paper we
are looking at Thailand and the ASEAN and Thailand and the OECD, we follow Bello et al.’s
approach in this comparison between economies i and j , thus:
1 a
yi Ai 1 a ( K / Y )i 1 a h
i (17)
y j A j (K / Y ) j
hj
Bello et al.’s approach takes the GDP and break it down to per hour basis; since this is
economy-to-worker, we used it as the threshold value for which the observed value is compared
since their work. The work of Konings and Stijn will guide us through the issue of worker’s training
impacting the firm’s productivity.
The methodological structure outlined in sections 4.2 and 4.3 is based on the work of
Konings and Stijn. The work of Konings and Stijn consists of three components, namely (i) impact
of training on productivity, (ii) impact of training on worker’s salary, and (iii) estimation method
for impact measurement. Although, we use Konings and Stijn as the basis for firm level
measurement, we take the issue back to its basic query: should firm invest in human capital? If so,
under what circumstances should that investment is made?
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Yit Ait Lˆit L Kit k (18)
where Lˆit = quality of aggregate labor, Kit = capital of firm, and Ait = Hicks neutral technical
efficiency (Hicks, 1966, and Wood & Woods, 1989). The logarithm of the output function may be
written as:
The fixed component ait may be decomposed to obtain the productivity level, and it represents
the firm’s output deviating from the mean.
The argument in (18) and (19) assumes that the labor force in the firm is homogenous.
However, in practice, this assumption would have to be relaxed so that the labor term is comprised
of trained and untrained employees: L̂ trained untrained ; thus, the relative or marginal
productivity of trained and untrained employees is defined as:
Y / LT Y / LU
T (20)
Y / LU
MPT MPU
T (21)
MPU
where LU = untrained employees, and LT = trained employees. We can now formally write the
labor aggregate as:
L
Lˆ LU 1 T LT or Lˆ L 1 T T (22)
L
where L = total employees in a firm where the fraction of the trained employees to the total
employees in the firm is LT / L . By substitution, we now have:
L
y 0 1 ln 1 T T k k (23)
L
L
When T T is small, the firm’s output may be approximated as:
L
L
y 0 1 T T k k (24)
L
The positive sign of the coefficient on the share of trained employees indicates the marginal product
of trained employees is higher than that of the untrained.
Thus far, the argument assumes that training is discrete, i.e. either the employees had
training or not. However, in practice, the level of training is not discrete. There is variation of
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training level among employees; therefore, the equation must accommodate this variation in a
continuous and non-discrete fashion. Mincer (1974) asserts that the individual employee j working
in firm i earns a wage that is a function of the level of his/her training, thus:
ln W j 0 T T j v j (25)
Therefore, the average wage bill of the firm may be given by: exp 0 T T j v j where Ti is
j
the training hours of employee j .
If the firm’s objective is to maximize profit, the labor term on the production function
should have the same form as the wage bill (Frazer, 2001):
Lˆ exp 1 T T j (26)
j
The production function then becomes:
Y A exp 1 T T j
j
K k
(27)
where k is the contribution of the individual employee j to the aggregate labor. This contribution
ln( L)
varies with the level of training: BT . By taking the logarithm, we obtained:
T j
j
y 1 ln exp T T j k k a
(28)
The first order of Taylor approximation of the labor term results in a log-linear equation that
can be estimated. The logarithm of output is a function of the logarithm of the amount of labor and
capital, and the average training hours of all employees in a firm:
y 0* T T k k (29)
where T measures the labor aggregate changes with training intensity, and is the labor in
y
production where the impact of output is T . This last term represents the percentage
T
output changes in responses to the variation in average training intensity of the workforce.
W j WU D j ,U WT D j,T (30)
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where W j = wage per employee j ; WU = wage of untrained employee; WT = wage of trained
employee, and D j,U = dummy variable set equal to 1 if the employee is untrained. Thus, the wage
bill for the entire firm is given as:
WL WU LU WT LT (31)
That is to say that the wage bill for the firm is a function of wage per untrained employee
multiplied by the total number of untrained employees plus the wage of trained employees
multiplied by the total number of trained employees. Equation (27) may be rewritten as:
L
WL WU L 1 T T (32)
L
The term T represents the relative wage premium for trained employee compared to the untrained;
W WU
it is calculated by: T T . Now, if we divide both sides of the equation by the number of
WU
employees ( L ), we obtain:
LT
w wU ln 1 T (33)
L
L
w wU T T (34)
L
Now, let x be a vector of controlled variable in case there is a variation due to imperfection
of the labor market, then the firm’s wage bill becomes:
L
w wU T T x (35)
L
There is a positive association between average wage at the firm level and the share of
trained employees. This is the implication of a positive wage premium for trained employees.
If there is a variation in training intensity, the firm’s wage level equation then becomes:
w wU T T (36)
where T is the training cost per employee, T is the wage premium changes with intensity of
w
training: , and wU is the average wage of employees with no training. Recall from (35) that we
T
used x as an indication of error term produced by the labor market imperfection; thus, the firm’s
average wage bill in (36) with x may be written as:
w wU T T x e (37)
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In the original work of Konings and Stijn, an estimation method was explained. However, in
this paper, we use only the foundational work on impact analysis in Konings and Stijn, for
estimation, we employ NK landscape simulation to approximate the values by using the following
test statistic:
F ( X ) 0.50
Zobs (38)
N
12
( ) ( x ) 0.50
Z* (39)
N
12
The following decision rule is used: H 0 : Zobs Z * means no significant increase in productivity
and H A : Zobs Z * means significant increase in productivity.
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2009 4,207.58 2,129.37 1.98 0.98
2010 5,065.38 2,337.96 2.17 1.17
2011 5,482.40 2,539.37 2.16 1.16
2012 5,850.30 3,476.02 1.68 0.68
2013 6,157.36 3,516.77 1.75 0.75
2014 5,921.09 3,325.12 1.78 0.78
2015 5,799.39 3,153.28 1.84 0.84
2016 5,899.42 3,060.36 1.93 0.93
2017 6,265.29 3,138.045 2.00 1.00
Mean 5,502.77 2,889.15 1.93 0.93
S 721.26 531.98 0.16 0.16
*World Economic Outlook 2017 (IMF, 2017). **Thailand minimum wage: 300 Baht per person per
day. Exchange rate at 35 Baht per USD.
At the national level, our situation analysis shows that the average productivity is
1.93 0.16 . This number is obtained by using the minimum wage as input and the per capita GDP
as output. If minimum wage is used as a base, every unit of input produces 1.93 units of output.
Thailand had achieved an increasing return to scale by a factor of 1.93. Productivity under this
approach does not provide adequate information on the effectiveness of labor in Thailand. We
divided the difference between output and input by input to obtained a more meaning measure for
productivity: 0.93 0.16 . In the past 10 years, none was observed that there had been significant
efficiency.
The national productivity level, obtained from the annual GDP from 2008 to 2017 as
tabulated in table 1, was put into NK landscape optimization equation to determine the local optima.
The result of this second level verification is presented in Table 2. Among the series of local
optima, as presented by F(Z) opt, there is no significant locale. The threshold for the decision rule is
pValue < 0.05; as shown in Table 2, all points are larger than 0.05. Thus, there is no significant
local optimum. We conclude that in the period between 2008 and 2017, the productivity of
Thailand’s GDP was not optimized. This implication of this finding is that the economy may have
been underperformed or that the economy was not exploited to its full potential.
Armed with the national figure, we examine 30 companies randomly selected from the stock
market in Thailand and found that the ratio of output to input is 1.46 0.39 and the percent change
of output to input is 0.46 0.39 (Table 3). By productivity ratio and efficiency, firms performed
below national average. Among the 30 companies, two companies show significantly high
efficiency (AOT and SAWAD). This finding presents a challenge for Thailand 4.0 policy aiming to
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transform the economy into the First World Economy. This challenge may be summarized in two
statements: (i) The national economy falls below FWE standard, and (ii) domestic firm falls below
the national average.
Similar to our treatment of the national data, we subjected the productivity level of the 30
firms to NK landscape optimization determination. The results are presented in Table 4. The
average local optima is 0.49 ± 0.07 with the mean pValue of 0.51 0.07 where the threshold value
for the pValue under 95% confidence interval is 0.05. We concluded that there was no firm
operating with optimum productivity level.
For the fiscal years 2014, 2014 and 2016, at the national level the productivity level was
1.93 0.16 and efficiency 0.93 0.16 . The sample firm’s corresponding figures were 1.46 0.39
for productivity and 0.46 0.39 for efficiency. If we use the national figure as the threshold, the
standard score for the thirty sampled firms is Z (1.46 1.93) / 0.16 2.94 for productivity and
Z (0.46 0.93) / 0.16 2.94 ; in both cases, the firms perform below national average in
productivity and efficiency with the significance level is p 0.003 .
6.0 CONCLUSION
In this part 1 of 2 parts research project, we presented our preliminary findings that could give a
broad picture of the national and firm levels analysis of productivity. In part 2, we will use our
findings I part 1 to analyze the impact of training on wage bill and productivity in detailed. In part
1, we found that the national productivity is higher than that of the firm. This difference may be
explained by the multiplicative effect where the firm who invested in training may not directly reap
the benefits from the training of the employees if they transfer to other firms or industries.
However, wherever these trained employees go they will go with higher skills and would produce
higher level of productivity; thus, the over all effects on the economy is the increase in national
productivity level. Despite the fact the national productivity level is higher than that of the firm, in
this part 1 of the research, through local optimization calculation under NK landscape method we
found that both firms and the national economy of Thailand are not operating to its fullest potential.
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In the context of Thailand 4.0 specifically for Thailand, and for industry 4.0 in general if the method
employed in this research is to be duplicated in other economies, the local optima shows that there
is a room for further improvement and growth in productivity.
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International Journal of Research & Methodology in Social Science
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