Moldovan Teselios, Calin

Ochiros, Vlad Mihai

Pocol, Cristina Bianca

Research Institute of Agricultural Economics

Impact assessment of Local Action Groups –as an innovative measure of the Leader Programme –on the diversification of non-agricultural activities and encouragement for small entrepreneursCristina Bianca POCOL, Calin MOLDOVAN TESELIOS,Vlad Mihai OCHIROSIntroductionLeader ProgrammeNew approach to rural development philosophy, methodology and practice in the EU Member StatesSolution to the sustainable development of  rural spaceThe 7 key featuresLeaderArea-based local developmentBottom-up elaboration and implementation of  strategiesLocal public-private partnerships: local action groups Innovation Integrated and multi-sectoral actions Cooperation Networking Understanding InnovationThe introduction of  a new product, a new process, a new organizationCreating a new market New and updated methods of adding value to local resourcesMeasures that are not taken into account by other policies or complementary to other programmesActions to provide endogenous responses to the weaknesses and problems of  rural areasThe Leader Programmein RomaniaThe 4th axis ofNational Rural Development Programme2007-2013The functioning ofLocal Action GroupsThe implementation of  cooperation projectsThe implementation of  local development strategies The creation of  LAGs in Romania between 2011-2012 81 LAGs in 201182 LAGs in 2012A surface of142000 km263% of  the eligibleterritory58% of  the eligibleLeader populationThe research contextLocal Action Groups established in Romania were successful.The projects undertaken did not show a very innovative character.They were rather similar to those conducted through the National Rural Development Programme 2007-2013. The research aimThe impact assessment of  projects implemented by Local Action Groups on:• the diversification of non-agricultural economic activities;• the encouragement of small entrepreneurs in rural areas;• the number of employees in non-agricultural enterprises. The research areaNorth West Region North EastRegionThe choice of the two regions was due to their large gap in terms of socio-economic development.The research areaIn North West and North East regions, we identified 82 LAGs, including 282 rural UATs (commune).The research methodsPropensity Score Matching: quantitative analysismethod was used to assess the impact of implementedprojects on the establishment of small and mediumnon-agricultural enterprises and the increase in thequality of life for the areas under study.The main arguments for using this method were: thedata availability for both categories – LAG members ornon-members, the advanced stage of projectsimplementation, the relevant dimension of the sample.The first step = the calculation of  Propensity Score, by using the SPSS program, on the basis of  following confoundershousing infrastructure: number of  houses, housing area, the existence of  drinkable/portable water, sewage and gas facilities.population structure: age, external/internal migration. infrastructure of  education: school units, school-age population, classrooms, class laboratory, PC in the school, libraries.infrastructure of  health: sanitary units, medical staff.workforce: number of  employees, number of  unemployed.dwellings: places of  living.The regression equation used for the calculation of  Propensity Score • The quality of the regression equation used for the calculationof propensity score is given by the indicators Cox & Snell RSquare (0,181) and Nagelkerke R Square (0,287)• The two values obtained are medium-low level, whichdemonstrates that the calculation model of propensity score isreasonable, but it could be improved by adding new indicators.The second step = matching UATs from intervention group and control groupAfter estimation of propensity score, using method “the nearest neighbour”, foreach UAT from intervention group (UAT from LAG) was matched an UAT fromcontrol group (non-LAG member). In total, 564 UATs were included in oursample.The sampling• The selection of UAT was stratified in accordance with thenumber of UAT from each Development Region:North East North West TotalIntervention group 129 153 282Control Group 129 153 282Total 258 306 564The number of  the non-agricultural businesses 642069487936888298141026146284962571863516898 69891792 19862218253129163272020004000600080001000012000Anul 2010 Anul 2011 Anul 2012 Anul 2013 Anul 2014 Anul 2015Intervention group (LAG members) Control group (non-LAG members) Δ (Intervention group-Control group)The number of  the non-agricultural businesses • In both groups, the number of non-agricultural businessesincreased. The trend is quasi-linear for both groups.• In intervention group, the increase was higher than thecontrol group. The impact of LAG was an amount of 1.500businesses, an increase with 23% from 2010, before theintervention.The number of  the non-agricultural businesses by regions44094867560763667127757524282630303534153743 3877198122372572295133843698010002000300040005000600070008000Anul2010Anul2011Anul2012Anul2013Anul2014Anul2015North-West regionIntervention group (LAG members)Control group (non-LAG members)Δ (Intervention group-Control group)2011 2081232925162687 268622002332268329363155 3112-189 -251 -354 -420 -468 -426-100001000200030004000Anul2010Anul2011Anul2012Anul2013Anul2014Anul2015North-East regionIntervention group (LAG members)Control group (non-LAG members)Δ (Intervention group-Control group)The number of  the non-agricultural businesses by regions• In North-West, the impact of LAGs is real and positive, LAGmembership is associated with an increase of 39%, which isthe number of non-agricultural businesses, meaning 1.700businesses.• In North-East, the impact of LAGs is rather negative, LAGmembership being associate with a decrease of 11% in thenumber of non-agricultural businesses, meaning a decrease of230 businesses.The total turnover for non-agricultural businesses (mil. €)19752560274129613232336890411311348 13831533170710711429 139315781699 1661050010001500200025003000350040001 2 3 4 5 6Intervention group (LAG members) Control group (non-LAG members) Δ (Intervention group-Control group)The total turnover for non-agricultural businesses (mil. €)• After an increase of the number of businesses, of course, inboth groups we identify an increase of the total turnover,resulted from non-agricultural businesses.• In the intervention group, the increase was higher than in thecontrol group. The impact of LAGs was an amount of 590million €, with an increase of 30% from 2010, before theintervention.The total turnover for non-agricultural businesses (mil. €) by regions171622502411257927912648428 484615 65575687012881767 1796192420351778050010001500200025003000Anul2010Anul2011Anul2012Anul2013Anul2014Anul2015North-West regionIntervention group (LAG members)Control group (non-LAG members)Δ (Intervention group-Control group)259 310331382442498476 648733728 778837-217-338-403-345 -336 -339-100001000Anul2010Anul2011Anul2012Anul2013Anul2014Anul2015North-East regionIntervention group (LAG members)Control group (non-LAG members)Δ (Intervention group-Control group)The total turnover for non-agricultural businesses (mil. €) by regions• In North-West, the impact of LAGs is real and positive, LAGmembership is associated with an increase of 29%, to thetotal turnover for non-agricultural businesses, meaning aplus/increase of 490 million €.• In North-East, the impact of LAGs is rather negative, LAGmembership is associated with a decrease of 47% in the totalturnover of non-agricultural businesses.The total number of  employees in non-agricultural businesses (mil. €)4886456448649857115775738 7740728822338124037944056 45941380612004222636 2460627101297973934601000020000300004000050000600007000080000900001 2 3 4 5 6Intervention group (LAG members) Control group (non-LAG members) Δ (Intervention group-Control group)The total number of  employees in non-agricultural businessess (mil. €)• The number of employees in non-agricultural businesses alsoincreased, for example:• in intervention group from 49.000 to 77.500.• in control group, the increase was from 29.000 to 46.000;however, in the last year we observed a decrease to 38.000.• In terms of impact, LAG membership means a plus ofalmost 20% employees in non-agricultural businesses, whichmeaning 10.000 employees were added.The total number of  employees in non-agricultural businessess (mil. €) by regions38285440695138956398604956431914264171572044522719 2367820749240212691230944336793681743570010000200003000040000500006000070000Anul2010Anul2011Anul2012Anul2013Anul2014Anul2015North-West regionIntervention group (LAG members)Control group (non-LAG members)Δ (Intervention group-Control group)10579123791359614759 152431308814558 1665519934213372226317312-3979 -4276-6338 -6578 -7020-4224-10000-50000500010000150002000025000Anul2010Anul2011Anul2012Anul2013Anul2014Anul2015North-East regionIntervention group (LAG members)Control group (non-LAG members)Δ (Intervention group-Control group)• In North-West, the impact of LAGs is real and positive, LAGmembership is associated with an increase of 33%, to thetotal number of employees of non-agricultural businesses,meaning a plus/increase of 13.000 employees.• In North-East, the impact of LAGs is rather negative, LAGmembership is associated with a decrease of 47%, in the totalnumber of employees of non-agricultural businesses,meaning a decrease of 3.000 employees.The total number of  employees in non-agricultural businessess (mil. €) by regionsConclusions• The impact of LAG membership, in those regions, regardingthe starting of new non-agricultural businesses was real andsignificant.• The number of new businesess increased fast and the trendwas positive. In the last year, data shows a slower rate.• The turnover, also, increased linearly in intervention group.The number of employees also increased, at a faster rate thanin the control group.• At regional level, in North West Region, the impact ispositive, while in North East Region it is rather negative.

Impact assessment of Local Action Groups – as an innovative measure of the Leader Programme – on the diversification of non-agricultural activities and encouragement for small entrepreneurs

http://repo.aki.gov.hu/2706/1/S7_2_Pocol_ERDN2016_Budapest.pdf

Impact assessment of Local Action Groups – as an innovative measure of the Leader Programme – on the diversification of non-agricultural activities and encouragement for small entrepreneurs

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