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Family Business and Regional Development

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Family Business and Regional Development Economics and Innovative Technologies Volume 2021 Number 4 Article 3 8-1-2021 FAMILY BUSINESS AND REGIONAL DEVELOPMENT S.O. Kuvandikov Samarkand Institute of Economics and Service, [email protected] Follow this and additional works at: https://uzjournals.edu.uz/iqtisodiyot Recommended Citation Kuvandikov, S.O. (2021) "FAMILY BUSINESS AND REGIONAL DEVELOPMENT," Economics and Innovative Technologies: Vol. 2021 : No. 4 , Article 3. Available at: https://uzjournals.edu.uz/iqtisodiyot/vol2021/iss4/3 This Article is brought to you for free and open access by 2030 Uzbekistan Research Online. It has been accepted for inclusion in Economics and Innovative Technologies by an authorized editor of 2030 Uzbekistan Research Online. For more information, please contact [email protected]. Economics and Innovative Technologies. Vol. 2021, No. 4, July-August FAMILY BUSINESS AND REGIONAL DEVELOPMENT Kuvandikov Shuhrat Oblokulovich, candidate of economic sciences, (DSc) student of the Samarkand Institute of Economics and Service, 140100, Amir Temur Street 9, Samarkand, Uzbekistan. еmail: [email protected] +99897 9293818 Abstract. The article examines the role of the family business in the development of regions. A methodology for rating regions has been developed based on statistical indicators reflecting the development of family business. Features of the development of family business in the Samarkand region of the Republic of Uzbekistan are revealed. Scientific and practical recommendations on increasing the role of the family business in the socio-economic development of the regions are proposed. Key words: family business, regional development, level of development of family business, index of development of family business, category of regions, rating of regions. Introduction It is necessary to take into account the role of family business in the socio- economic development of the regions. Family business is an important tool for regional development and plays an important role in ensuring sustainable economic growth. The role of family business is very high, especially in the economies of developed countries. According to the Institute for Family Business, 87.6% of all businesses in the UK, half of those employed in the private sector (14.2 million), 31% of GDP, 75% of all businesses in Spain and 65% of GDP, 90% of all types of enterprises in the United States and 60% of GDP, and 18% of total exports in Italy are accounted for by family businesses. The role of family business in the national economy of Uzbekistan and its quantitative measures have not been sufficiently studied. Therefore, we set a goal to develop a methodology for a comprehensive assessment of the role of family business in the socio-economic development of the regions. To achieve this goal, you must: to analyze the existing methods for assessing the role of family entrepreneurship; to develop a methodology for assessing the role of family entrepreneurship at the regional level; to test the developed assessment methodology. 4/2021 (№ 00054) https://uzjournals.edu.uz 1 Economics and Innovative Technologies. Vol. 2021, No. 4, July-August Literature Review Fundamental issues of family business development have been studied by well- known foreign scholars. Research in this area has scientifically revealed the essence of family business and its differences from non-family businesses (Anderson & Reeb, 2003; Tanewski, Prajogo & Sohal, 2003; Beehr, Drexler & Faulkner,1997; Daily & Dollinger, 1992), the role of family business in the development of the economy and industry, as well as issues of internationalization (Gallo, Miguel Angel & Jannicke Sveen, 1991), factors influencing the capital structure, financial resources and business costs and financial decisions of the family business (Romano, Tanewski & Smyrnios, 2001; Blanco-Mazagatos, de Quevedo-Puente & Castrillo, 2007), the role of the founder in the family firm and issues of planning his strategic behavior (Kelly & Kets de Vries, 2000) characteristics of cultural and ethical behaviors in the study of differences in family and non-family business (Duh, Belak & Milfelner, 2010; Dyer,2003; Vallejo, 2008) as well as Russian scientists (Barkhatova, 1999; Volkov, 2011; Kalendjyan, 2011; Korchagina, 2015; Korolev 2007; Chernitsky, 2008) have scientifically and practically studied the socio-economic nature, types, classification and theoretical conceptual basis of family business and the problems of its development. Many factors of socio-economic development of the regions in Uzbekistan have been studied. The research conducted in this bar can be grouped into the following areas: Assessment of opportunities for self-development of regions, as well as issues of ensuring integrated sustainable socio-economic development; Problems of innovative development of regions; The role of small business in the development of regions and their development on the basis of an integrated index and rating indicators are developed. These studies show that there is no single approach to regional development. In these studies, various factors of regional development have been studied. However, the role of family business was not taken into account. Therefore, there are difficulties in generalizing the results of the above research in practice. Theoretical research has also been conducted to determine the role of family business in the development of the regions and important conclusions have been drawn. In doing so, a theoretical model of the relationship between family business and regional development has been developed (Basco, 2015). The Future research section of this article outlines ways to further develop the proposed theoretical model in future research. This can be done by developing a description of the role of family business in the regions and the development of future directions. Therefore, we set a goal to develop a rating methodology to determine the role of family business in the regions of Uzbekistan. 4/2021 (№ 00054) https://uzjournals.edu.uz 2 Economics and Innovative Technologies. Vol. 2021, No. 4, July-August In this study, a methodological approach to assessing the role of family business in regional development was developed. Because the prospects of the Uzbek economy in many respects depend on the development of family business. In this regard, this study is a special method of studying the problems of regional development and plays an important role in the development of effective measures for the development of family business. Materials and methods As of January 1, 2020, the number of family businesses in Uzbekistan amounted to 24137. The share of family businesses in all types of enterprises is 8.0%, their net income from sales of goods and services is 679320.3 million soums, their share in family income is 55.2%, the jobs created at their expense are 358.56 thousand1. This shows that the level of development of family business in the economy of the Republic of Uzbekistan is insufficient. Therefore, the tasks of developing the necessary measures for the further development of family business have been identified. This justifies the need to study family business in all its aspects and to study foreign experience in this area2. The analysis of the development of family business in 16 regions of Samarkand region showed that the share of operating family businesses in the regions is unevenly distributed. In particular, as of January 1, 2020, the number of registered family businesses in Samarkand region amounted to 6780, of which the largest in terms of regions - Samarkand city - 1658, Samarkand district - 788, Pastdargom district - 786, Payarik district - 566, Ishtikhon district - 496 and at least Pakhtachi district - 46, Nurabad district - 51 and Koshrabat district - 53. The highest rate of inactivity of family businesses registered in the regions was in Nurabad district - 11.8%, Bulungur district - 7.4% and Taylak district - 7.2%. During the analyzed period, the largest number of new family enterprises was in Samarkand - 486, and the least - in Nurabad district - 9, the largest number of liquidated family enterprises - in Ishtikhon district - 16, the least - in Jambay and Pakhtachi districts - 1 (Table1). 1 Data of the State Statistics Committee of the Republic of Uzbekistan 2 Decree of the President of the Republic of Uzbekistan "On additional measures to improve the procedure for lending to projects implemented under state programs for the development of family business". (October 24, 2019) № 4498. 4/2021 (№ 00054) https://uzjournals.edu.uz 3 Economics and Innovative Technologies. Vol. 2021, No. 4, July-August Table 2. Number of family businesses in Samarkand region (as of January 1, 2020) Regions Registered Activity status of Share of inactive Number of Number of Number of Family Businesses family businesses newly Family Family in registered opened Businesses Businesses Active Inactive family Family Completed businesses, % Businesses Samarkand region 6780 6447 333 4,9 2287 88 Samarkand city 1658 1658 56 3,3 486 15 Kattakurgan city 91 91 5 5,2 48 4 Districts: Oqdaryo 225 213 12 5,3 91 5 Bulungur 217 201 16 7,4 79 12 Jomboy 325 318 7 2,2 135 1 Ishtikhon 496 465 31 6,3 89 16 Kattakurgan 282 267 15 5,3 149 2 Kushrabat 53 52 1 1,9 16 - Narpay 213 207 6 2,8 101 6 Payarik 566 533 33 5,8 178 7 Pastdargam 786 751 35 4,5 248 5 Paxtachi 46 46 0 - 22 1 Samarkand 788 732 56 7,1 317 2 Nurabad 51 45 6 11,8 9 2 Urgut 478 456 22 4,6 185 5 Tayloq 444 412 32 7,2 134 5 Source: Author's calculations based on the data of the Department of Statistics of Samarkand The share of 6780 family enterprises registered in Samarkand region by sectors of the economy is agriculture, forestry and fisheries - 8.1% (555), industry - 27.5% (1863), construction - 0.7% (47), services ( trade, transportation and storage, accommodation and food services, information and communication, health and social services) - 58% (3917) and other sectors - 5.9% (398). During this period, 94.9% of registered family businesses in these areas operated in the region, while 5.1% ceased operations for various reasons.
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