RELATIONSHIP BETWEEN COMPETITIVENESS OF SERVICE INDUSTRY AND PSYCHOLOGICAL BEHAVIOR: AN ANALYSIS BASED ON PSYCHO-ECONOMICS THEORIES

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Revista Argentina de Clínica Psicológica 2020, Vol. XXIX, N°2, 793-799

DOI: 10.24205/03276716.2020.312 793

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Zhongyi Liu

1

_{, Xuquan Zhai}

2

_*

Abstract

In recent years, psychology has been increasingly applied in various fields. Drawing on relevant theories of psycho-economics, this paper explores the relationship between the competitiveness of service industry and psychological behavior. From the perspective of psycho-economics, an evaluation index system was established for the competitiveness of service industry, considering the impacts of both internal and external psychological factors. The judgment matrices of criterion layer and factor layer were created based on the index system. The evaluation results show that, despite the rapid growth, the service industry in China is not as competitive as that in developed countries; the competitiveness of service industry is affected by internal and external factors on both individual and group levels; the most important influencing factor is the ability and level of employees for emotional management. Based on these results, several countermeasures were

put forward to enhance the competitiveness of China’s service industry. The research results provide a

reference for the development of other industries from the angle of psychology.

Key words: Psycho-Economics, Industrial Competitiveness, Service Industry, Psychological Behavior.

Received: 23-03-19 | Accepted: 07-09-19

INTRODUCTION

With the rapid development and progress of social economy, psychology is becoming more and more important in people's daily life. People's daily consumption, investment, health, medical care and other aspects are increasingly related to psychology; therefore, psychology is more and more concerned by people (Houston, Kinnie, Lupo et al., 2000). At the same time, psychology has been widely used in all aspects of society, among which the application in the economic field is gradually deepening. The competitiveness of industrial economic

1_{School of Economics, Jilin University of Finance and} Economics, Changchun 130117, China. 2_{China Center for} Public Sector Economy Research, Jilin University, Changchun 130012, China.

E-Mail: [email protected]

development is an important aspect and embodiment of a country's comprehensive competitiveness. Improving the competitiveness of industrial economic development can promote the rapid development of the country's overall economy (Lopez, Oehlert, & Moberly, 1997). At present, China's economic development has entered the shift and adjustment period, and the development of industrial economy is also facing the important goals and tasks of structural optimization and adjustment. Applying psycho-economics to the development of industrial economy can help us to understand the difficulties and pain points of industrial economic development to some extent, and accelerate the continuous development of various industries by solving these difficulties. Therefore, it plays a positive role in the promotion of China's overall competitiveness (Culi é, Khapova, & Arthur,

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ZHONGYI LIU,XUQUAN ZHAI 794

2014).

At present, scholars at home and abroad have done a lot of researches on psycho-economics and industrial competitiveness, and formed many research results. Some scholars have studied the evolution of psycho-economics and related theories (Fletcher & Davis, 2008); some scholars have conducted in-depth research on the research model of industrial competitiveness (Nakano & Kitamura, 2001); others have conducted research on the fields and scope of application of psychology, such as medical treatment, gambling industry, etc. (James & Johnson, 1983). However, so far, few scholars have combined psycho-economics with the development of industrial economic competitiveness for research. There are few theoretical and empirical analyses. With psycho-economics been applied in more and more fields, the relationship between psycho-economics and industrial economic competitiveness deserves further study.

Taking the service industry as an example, based on the relevant theories of psycho-economics, this paper studies the relationship between the competitiveness of industrial economic development and psychological behavior, establishes a competitiveness evaluation index system of service industry from the perspective of psycho-economics, and puts forward countermeasures to enhance the competitiveness of China's service industry from the psychological level, which provides theoretical guidance and practical reference to the development of China's service industry and the promotion of overall competitiveness.

THEORETICAL BACKGROUNDS

Psycho-economics

Psycho-economics is a new discipline, which mainly originated in 1960s and 1970s. Its research content involves economics, psychology, sociology, management and many other fields. It mainly studies the psychological response laws and psychological characteristics of the groups in production relations, policy making, economic development laws and other issues formed in the process of economic activities (Kirkcaldy, Furnham, & Martin, 2003).

Daniel Kahneman, a famous American scholar, first studied psycho-economics. He applied the basic theory of psychology to economics and created a new field of

psycho-economics. At present, some major theories involved in psycho-economics include effect theory, expectancy theory, risk theory, game theory, welfare theory, etc. (Brown, Cron, & Slocum, 1998), as shown in Figure 1.

Figure 1

.

The main theories of

psycho-economics

Psychoeconomic theory

Effect theory Expectancy

theory Risk theory Game theory Welfare theory

Industrial Competitiveness

Industrial competitiveness mainly refers to that one industry in one country has strong advantages in terms of production efficiency, industrial income and meeting consumer demand compared with that in other countries. This is a relative concept. In terms of scope, it refers to the comparison between countries or regions, while in terms of content, it refers to the comparison between specific industries (Perez, 1999)

Figure 2

.

Porter's Diamond Model

Enterprise strategy, structure and horizontal

competition

Production factors Demand conditions

Related and supporting industries Opportunity

Government

There are many theories involved in industrial competitiveness. At present, the most influential theory in the world is the "Diamond Model" put forward by renowned American scholar Porter. He believes that industrial competitiveness is closely related to four factors, namely, production factors, demand conditions, related an supporting industries and enterprise strategies. In addition, the

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RELATIONSHIP BETWEEN COMPETITIVENESS OF SERVICE INDUSTRY AND PSYCHOLOGICAL BEHAVIOR: AN ANALYSIS BASED ON PSYCHO-ECONOMICS THEORIES 795

government and external opportunities have an impact on the four aspects, and thus have an indirect impact on industrial competitiveness (Sarros, Cooper, & Santora, 2008). The theory is shown in Figure 2.

COMPETITIVENESS ANALYSIS OF THE

DEVELOPMENT OF CHINA'S SERVICE INDUSTRY

Analysis of the development of China's Service Industry

In China, service industry is a very important part of industrial economy. With the continuous optimization and adjustment of industrial structure, the overall development of service industry is relatively fast (Craft, Magyar, Becker et al., 2003). In terms of the proportion in the national economy, the added value of service industry in GDP increased from 44.3% in 2012 to 48.7% in 2018. From the perspective of industry driven employment, the proportion of service industry employment increased from 53.1% in 2012 to 56.8% in 2018, as shown in Table 1.

Table 1.

The proportion of China's GDP, service industry growth and employment in 2012-2018

Year GDP (Billion yuan) Proportion of added value of service industry (%)

Proportion of employment in service industry (%)

2012 168305.7 44.3 53.1

2013 177652.8 44.7 53.8

2014 199674.2 44.9 54.6

2015 205493.4 45.2 55.1

2016 227068.1 45.5 55.4

2017 248633.5 46.2 55.9

2018 263442.7 48.7 56.8

Figure 3

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Proportion of added value of three major industries in GDP in 2018

11.1

4.2

2.1

20.1 40.2

27.6 27.3

50.3 48.7

68.2 70.6

29.6

0 10 20 30 40 50 60 70 80

China World average High income country Low income country

P

ro

p

o

rtio

n

Different type of countries

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Figure 4

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Comparison of output value of service industry between China and major developing

countries in 2015-2018

Comparison of the Global Competitiveness of China's Service Industry

With the continuous development of the world economy, the proportion of service industry in the national economy is increasing year by year, and the proportion of service industry in the total economy tends to be larger in developed countries (Alagaraja, 2013). According to the statistic of 2018, the proportion of service industry in high-income countries is as high as 70.6%, while the world average level is 68.2%. Although China's service industry is developing rapidly, the proportion of service industry is only 48.7%, far lower than that in high-income countries, as shown in Figure 3.

Specifically speaking, at the national level, compared with other developing countries, China's service industry competitiveness does not have obvious advantages. The proportion of service industry in GDP of Brazil, South Korea, India and other countries is higher than that of China, as shown in Figure 4. From the perspective of national comparison, there are obvious deficiencies in the competitiveness of

China's service industry.

THE RELATIONSHIP BETWEEN THE

PERFORMANCE OF SERVICE INDUSTRY

COMPETITIVENESS AND PSYCHOLOGICAL

BEHAVIOR

Construction of Industry Competitiveness Evaluation Index from the Perspective of Psycho-economics

Based on the relevant theories of psycho-economics, this paper studies the influence of internal and external psychological factors on the competitiveness of service industry from the perspectives of individuals and groups. Meanwhile, the internal and external psychological factors of each level can be divided into several specific indicators, so as to build the evaluation index system of service industry competitiveness from the perspective of psycho-economics. See Table 2 for details.

According to the index system established in Table 2, the judgment matrix of criterion layer and factor layer can be constructed respectively, as shown in Table 3 and table 4.

45.2 45.5 46.2

48.7 50.2

47.8 49.2

70.3

48.4 49.6

52.7 _51.6

16.2

45.3 47.9

50.2

0 10 20 30 40 50 60 70 80

2015 2016 2017 2018

P

ro

p

o

rtio

n

Proportion of added value of service industry

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Table 2.

The psychological and economic index system of service industry competitiveness

evaluation

Target layer A Criterion level B Factor level C

Competitiveness of service industry (A)

Intra individual (B1)

Belief of enterprise managers (C1) Employee attitude (C2) Emotional management level (C3)

Self control level (C4)

Individual external (B2)

Customer satisfaction (C5) Employee satisfaction (C6) Information management level (C7)

production efficiency (C8)

Group internal (B3)

Group self identity (C9) Group status perception (C10) Group competition consciousness (C11)

Group innovation consciousness (C12)

Group external (B4)

Industrial efficiency (C13) National industrial strategy and policy (C14)

Industrial scale level (C15)

Table 3.

The judgment matrix of criterion layer

A B1 B2 B3 B4

B1 1 3 2 1

B2 1/3 1 1 2

B3 1/2 1 1 3

B4 1 1/2 1/3 1

Single layer weight 0.2874 0.2639 0.2246 0.2241

Table 4.

The judgment matrix of factor layer

B1 C1 C2 C3 C4

C1 1 2 3 1

C2 1/2 1 2 2

C3 1/3 1/2 1 4

C4 1 1/2 1/4 1

Single layer weight 0.1968 0.2391 0.2962 0.2679

Table 5.

The psychological and economic index system of service industry competitiveness

evaluation

Target layer A Criterion level B Weight Factor level C Weight of this layer Absolute weight

A

B1 0.2874

C1 0.1968 0.0662

C2 0.2391 0.0674

C3 0.2962 0.0839

C4 0.2679 0.0699

B2 0.2639

C5 0.2248 0.0625

C6 0.2641 0.0684

C7 0.2567 0.0669

C8 0.2544 0.0661

B3 0.2246

C9 0.2606 0.0603

C10 0.2487 0.0544

C11 0.2509 0.0596

C12 0.2398 0.0503

B4 0.2241

C13 0.3864 0.0784

C14 0.3533 0.0719

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According to the results in Table 3 and Table 4, the consistency ratio can be obtained by consistency test. It is found that the calculation results are less than 0.1. Therefore, we can conclude that the judgment matrix has satisfactory consistency.

Using the same calculation method, the judgment matrix of B2, B3 and B4 in the factor layer can be obtained, so as to obtain the weight coefficient, as shown in Table 5.

According to the results in Table 5, in terms of the competitiveness of the service industry, the weight of internal influence factors of the individual are the highest, which is 0.2874, and the weight of external influence factors of the group are the lowest, which is 0.2241. Among the individual external factors, the weight of employees' emotional management ability is the highest. It can be seen that the psychological behavior of employees has a direct and significant impact on the competitiveness of the service industry. To promote the competitiveness of the service industry, the psychological behavior of employees should be concerned and the ability of emotional management of employees should be improved.

Measures to Improve the Competitiveness of Service Industry

(1) Individual Level

It can be seen from the research results that the belief of managers and employees as well as the ability of emotional management has a greater impact on the competitiveness of the service industry, because the level of emotional management will have a direct impact on the production efficiency of employees and the management efficiency of enterprises (Newby & Klein, 2014). Therefore, on the one hand, the enterprise should constantly improve the working ability of employees and the management level of managers, and on the other, it should constantly strengthen the management of employees' emotions, timely understand and pay attention to employees' psychological needs so that to create a sound working atmosphere for employees within the enterprise. Through these measures, the working ability and production efficiency of employees can be improved so as to produce better products and provide better services.

(2) Group Level

From the national point of view, it is

necessary to formulate strategies and policies suitable for the development of service industry, increase the support for enterprises, and guide the healthy development of enterprises. From the perspective of enterprises, it is necessary to increase the training of service industry talents, improve their professional ability, and pay attention to the development of their mental health at all times. Only by caring for employees, talents can be retained (Moja & Carmelo, 1992). From the perspective of employees, it is necessary to strengthen communication and exchange among the staff to form a virtuous circle within the enterprise.

CONCLUSION

Taking the service industry as an example, based on the relevant theories of psycho-economics, this paper studies the relationship between the competitiveness of industrial economic development and psychological behavior. The conclusions are as follows:

(1) With the continuous optimization and adjustment of China's economic structure, the service industry is growing at a fast rate, but compared with foreign high-income countries, the competitiveness of China's service industry is not strong.

(2) The evaluation index system of service industry competitiveness is constructed based on psycho-economics. The competitiveness of service industry is influenced by internal and external factors of individual and group. The weight of internal factors of individual is the highest, and that of external factors of group is the lowest.

(3) Among the internal factors that affect the competitiveness of service industry, the weight of employees' emotional management ability and level is the highest.

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