THE RELATIONSHIP BETWEEN EVENT SPEND, SOCIAL COHESION AND ECONOMIC DEVELOPMENT By Musa Gumede Student No: 21751941 A dissertation submitted in fulfilment of the requirements of the Master of Management Sciences:Hospitality and Tourism Management In the Faculty of Management Sciences, Hospitality and Tourism, Durban University of Technology. Durban, South Africa APPROVED FOR FINAL SUBMISSION APPROVED FOR FINAL SUBMISSION __________________ ______________ __________________ _______________ Name Supervisor/s DATE 2 DECLARATION The Registrar (Academic) Durban University of Technology Dear Madam I, Musa Gumede, Student No 21751941 Hereby declare that the dissertation entitled: The relationship between Event Spend, Social Cohesion and Economic development Is the result of my own investigation and research and that it has not been submitted in part or in full, for any other degree or any other institution of higher learning. Subsequently, other sources are acknowledged and giving explicit references. Signed:……………………………………… Date:…10 May 2017……………………… 2 3 The relationship between Event Spend, Social Cohesion and Economic Development Musa Gumede A research thesis submitted to the Faculty of Management Sciences, Durban University of Technology, Durban, in partial fulfilment of the requirements for the degree of Master of Management Sciences : Hospitality and Tourism Management Durban, May 2017 3 4 Abstract The study addressed four questions using secondary annual time series data: (1) How is event spend related to economic development? (2) How are the physical attributes of the region (natural capital) related to economic development?(3) How is social cohesion related to economic development? (4) How does human capital influence economic development? The study period starts in 1994 and ends in 2016, accordingly 100 data points were pulled from the time series. Error Correction Model and Ordinary Least Squares were used as analytical tools to test the regression model developed for the study. Economic development is the dependent variable and is represented by tourism employment data sourced from Statistics South Africa. The independent variables are event spend represented by expenditure figures for culture, sports and recreation published by Statistics SA; human capital was measured using gross educational ratio for secondary education accessed from the World Bank database; natural capital was measured using the gross domestic product attained from Statistics South Africa; and social cohesion was measured using social expenditure data acquired from the South African Reserve Bank. The theoretical framework that underpins the study is the geography political theory as espoused by different authors including Collier (2007) and Kollosov (2001). On the basis of this theoretical framework the study seeks to look at the effect of event spend, natural capital, human capital and social cohesion on economic development. The findings of the study show that there is no relationship between economic development, event spend and human capital. However a relationship was established between natural capital and social cohesion. The results of the study will inform policymakers in the allocation of budgets towards major events. It will also contribute to the equitable distribution of resources to promote social cohesion in communities. 4 5 Declaration I, Musa Gumede, declare that this research is my own, unaided work, except as indicated in the acknowledgements, the text and the references. It is submitted in partial fulfilment for the requirement for the degree of Master of Tourism in the Faculty of Management Sciences at the Durban University of Technology, Durban. It has not been submitted before, either whole or in part, for any degree or examination at this or any other university. Musa Gumede Signed at .....Durban...................................................................................................... On the .......10th .................................. day of .............May.................................... 2017 5 6 Dedication To my family, work colleagues and EThekwini Municipality for support and encouragement. 6 7 Acknowledgements I would like to express my deepest appreciation to the following people for their advice, guidance, patience and ongoing support: my supervisor, Prof. Pumela Msweli for her wisdom, guidance and relentless push; my friend and colleague, Mr. Vusi Mazibuko for his support and advice; my secretary and colleague, Bonnie Nzuza for always being helpful and considerate even during stressful periods; my mother, Mama Babongile Gumede for showing love and guidance and support during hard times; my family, Beverley Motlhabani (partner), Sibonelo and Siyabonga for their constant support. I have appreciated it dearly. To all the Academic Achievers group, Dr. Zodwa Ngobese, Dr. Fikile Ndlovu, Dr. Victoria Mubaiwa and Mr. Vusi Mazibuko thank you for the push and comeraderie shown throughout this journey. 7 8 Contents THE RELATIONSHIP BETWEEN EVENT SPEND, SOCIAL COHESION AND ECONOMIC DEVELOPMENT .... 1 The relationship between Event Spend, Social Cohesion and Economic development ......................... 2 Abstract ................................................................................................................................................... 4 Declaration .............................................................................................................................................. 5 Dedication ............................................................................................................................................... 6 Acknowledgements ................................................................................................................................. 7 Chapter One: Introduction .................................................................................................................... 11 1.1. Study Overview ..................................................................................................................... 11 1.2. Problem Statement ............................................................................................................... 12 1.3. Purpose and significance of the study .................................................................................. 13 1.4. Research design .................................................................................................................... 15 1.5. Delimitations ......................................................................................................................... 15 1.6. Operational definition of concepts and variables ................................................................. 15 1.7. Concluding Summary ............................................................................................................ 16 Chapter Two: Literature Review and Conceptual Framework .............................................................. 17 2.1 Introduction and Background ............................................................................................... 17 2.2 Theoretical Framework ......................................................................................................... 20 2.3 Conceptual Model ................................................................................................................. 22 2.3.1 Economic development ................................................................................................ 23 H3: Human capital influences economic development ................................................................ 25 2.3.2. Relationship between event spend and economic development ...................................... 25 2.3.3. Relationship between natural capital and economic development ................................... 30 2.3.4. Relationship between human capital and economic development ................................... 31 2.3.5. Relationship between social cohesion and economic development .................................. 32 2.4 Measurement issues ............................................................................................................. 35 2.5 Definition of events ............................................................................................................... 37 8 9 2.5.1 Definition of terminology used: Mega-events, Special events, Hallmark event, Community events ........................................................................................................................ 37 2.5.2 Mega-Events ................................................................................................................. 40 2.5.3 Hallmark Event .............................................................................................................. 42 2.5.4 Community Events ........................................................................................................ 42 2.6 Conclusion ............................................................................................................................. 43 Chapter Three: Research Methodology ................................................................................................ 45 3.0. Introduction ............................................................................................................................... 45 3.1. Research design ........................................................................................................................