IDEAS home Printed from https://ideas.repec.org/a/bla/presci/v99y2020i6p1583-1605.html
   My bibliography  Save this article

Intraregional trade shares for goods‐producing industries: RPC estimates using EU data

Author

Listed:
  • Michael L. Lahr
  • João Pedro Ferreira
  • Johannes R. Többen

Abstract

The lack of subnational trade data has dampened the development of reliable regional and multiregional models for regional policy development. So, most researchers and vendors of regional and interregional economic models continue to rely on location quotients, supply–demand pool techniques, or minor modifications of them, despite knowing that they under‐estimate interregional trade. In this piece, we analyse the relative viability of estimates of intraregional trade—so called “regional purchase coefficients” (RPCs). We do so for manufacturing sectors in 28 EU countries using the World Input–Output Database. We introduce an RPC‐estimating technique using a quasi‐binomial regression approach for goods‐producing industries; we apply standard supply/demand ratios as RPCs for service‐based industries. We then apply the estimates to an aggregate EU input–output (I‐O) table and measure how closely the results approximate the I‐O tables (direct requirements matrices) for each of the 28 EU nations. We compare these findings to those obtained by other conventional approaches. We also evaluate their ability to replicate the country Leontief inverses and output multipliers. We find quasi‐binomial regression approaches superior across the board. La falta de datos sobre comercio a escala subnacional ha ralentizado el desarrollo de modelos regionales y multirregionales fiables para la formulación de políticas regionales. Así pues, la mayoría de investigadores y proveedores de modelos económicos regionales e interregionales siguen basándose en cocientes de localización, técnicas de agrupación de la oferta‐demanda, o en pequeñas modificaciones de los mismos, a pesar de saber que subestiman el comercio interregional. En este artículo se analiza la viabilidad relativa de las estimaciones del comercio intrarregional, también llamados “coeficientes de compra regional” (CCR). El análisis se hizo para los sectores manufactureros de 28 países de la UE utilizando la Base de Datos Mundial de Insumos y Productos. Se introdujo una técnica de estimación de CCR que utiliza un enfoque de regresión cuasi‐binomial para las industrias productoras de bienes; para las industrias basadas en servicios se aplicaron cocientes estándar de oferta/demanda como CCR. A continuación se aplicaron las estimaciones a un cuadro agregado de input‐output (I‐O) de la UE y se midió qué tan cerca se aproximan los resultados a los cuadros I‐O (matrices de requisitos directos) para cada una de las 28 naciones de la UE. Estos hallazgos se compararon con los obtenidos por otros enfoques convencionales. También se evaluó su capacidad de replicar la matriz inversa de Leontief de cada país y los coeficientes multiplicadores de la producción. Se encontró que los enfoques de regresión cuasi‐binomial son superiores en todos los aspectos. 地方の商取引データの欠如により、地域の政策開発に役立つ信頼性のある単地域及び多地域モデルの作成が妨げられている。そのため、地域及び地域間の経済モデルの研究者及び業者のほとんどは、立地係数、供給/需要のプールデータを用いる方法、またはそれらにわずかな改変を加えた方法では地域間取引が過小評価されることを知りながら、それらに依存し続けている。本稿では、いわゆるregional purchase coefficient (RPC) なる、地域間取引の推計値の相対的な実行可能性を分析する。分析は、世界産業連関表データベースを用いて28のEU加盟国の製造業セクターに関して実施する。製造業に準二項回帰アプローチを用いた、RPC推計法を導入し、標準的な需要供給の比率をRPCとしてサービス業に適用する。次に、この推計値をEU全体の集計された産業連関表 (直接要求マトリックス) に適用し、その概算結果が28のEU加盟国それぞれの産業連関表とどの程度近いかを測定する。これらの結果を他の従来の方法で得られた結果と比較した。また、国別のレオンチェフ逆行列と産出乗数を再現する性能を評価した。全面的に準二項回帰アプローチが優れていることが分かった。

Suggested Citation

  • Michael L. Lahr & João Pedro Ferreira & Johannes R. Többen, 2020. "Intraregional trade shares for goods‐producing industries: RPC estimates using EU data," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1583-1605, December.
  • Handle: RePEc:bla:presci:v:99:y:2020:i:6:p:1583-1605
    DOI: 10.1111/pirs.12541
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/pirs.12541
    Download Restriction: no

    File URL: https://libkey.io/10.1111/pirs.12541?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    2. Anthony T. Flegg & Timo Tohmo, 2016. "Estimating Regional Input Coefficients and Multipliers: The Use of FLQ is Not a Gamble," Regional Studies, Taylor & Francis Journals, vol. 50(2), pages 310-325, February.
    3. H. Murat Celik, 2004. "Forecasting interregional commodity flows using artificial neural networks: an evaluation," Transportation Planning and Technology, Taylor & Francis Journals, vol. 27(6), pages 449-467, September.
    4. Fujimoto, Takashi, 2015. "Quantitative Analysis of the Regional Income Determinant Factors in a Remote Island Economy: Generation and Application of a Regional Input-Output Table," Journal of Rural Economics, Agricultural Economics Society of Japan, vol. 86(4), pages 1-16, March.
    5. Massimo Del Gatto & Gianmarco I. P. Ottaviano & Marcello Pagnini, 2008. "Openness To Trade And Industry Cost Dispersion: Evidence From A Panel Of Italian Firms," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 97-129, February.
    6. Michael Lahr & Louis de Mesnard, 2004. "Biproportional Techniques in Input-Output Analysis: Table Updating and Structural Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 16(2), pages 115-134.
    7. A. T. Flegg & C. D. Webber, 1997. "On the Appropriate Use of Location Quotients in Generating Regional Input-Output Tables: Reply," Regional Studies, Taylor & Francis Journals, vol. 31(8), pages 795-805.
    8. Randall Jackson & Walter Schwarm & Yasuhide Okuyama & Samia Islam, 2006. "A method for constructing commodity by industry flow matrices," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(4), pages 909-920, December.
    9. Anthony T. Flegg & Timo Tohmo, 2019. "The regionalization of national input‐output tables: A study of South Korean regions," Papers in Regional Science, Wiley Blackwell, vol. 98(2), pages 601-620, April.
    10. Tobias Kronenberg, 2009. "Construction of Regional Input-Output Tables Using Nonsurvey Methods," International Regional Science Review, , vol. 32(1), pages 40-64, January.
    11. Anthony T. Flegg & Leonardo J. Mastronardi & Carlos A. Romero, 2016. "Evaluating the FLQ and AFLQ formulae for estimating regional input coefficients: empirical evidence for the province of Córdoba, Argentina," Economic Systems Research, Taylor & Francis Journals, vol. 28(1), pages 21-37, March.
    12. Robinson, Dennis P. & Liu, Zuoming, 2006. "The Effects of Interregional Trade Flow Estimating Procedures on Multiregional Social Accounting Matrix Multipliers," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(1), pages 1-21.
    13. Francesc Ortega & Giovanni Peri, 2016. "Openness and income: The roles of trade and migration," World Scientific Book Chapters, in: The Economics of International Migration, chapter 10, pages 309-329, World Scientific Publishing Co. Pte. Ltd..
    14. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
    15. Karen R. Polenske & Geoffrey J. D. Hewings, 2004. "Trade and spatial economic interdependence," Advances in Spatial Science, in: Raymond J. G. M. Florax & David A. Plane (ed.), Fifty Years of Regional Science, pages 269-289, Springer.
    16. Malte Jahn & Anthony T. Flegg & Timo Tohmo, 2020. "Testing and implementing a new approach to estimating interregional output multipliers using input–output data for South Korean regions," Spatial Economic Analysis, Taylor & Francis Journals, vol. 15(2), pages 165-185, April.
    17. Richard Wood & Konstantin Stadler & Tatyana Bulavskaya & Stephan Lutter & Stefan Giljum & Arjan De Koning & Jeroen Kuenen & Helmut Schütz & José Acosta-Fernández & Arkaitz Usubiaga & Moana Simas & Olg, 2014. "Global Sustainability Accounting—Developing EXIOBASE for Multi-Regional Footprint Analysis," Sustainability, MDPI, vol. 7(1), pages 1-26, December.
    18. Anthony T. Flegg & Timo Tohmo, 2013. "Regional Input--Output Tables and the FLQ Formula: A Case Study of Finland," Regional Studies, Taylor & Francis Journals, vol. 47(5), pages 703-721, May.
    19. Dina N. Elshahawany & Eduardo A. Haddad & Michael L. Lahr, 2017. "Accessibility, transportation cost, and regional growth: a case study for Egypt," Middle East Development Journal, Taylor & Francis Journals, vol. 9(2), pages 256-277, July.
    20. Ana L.M. Sargento & Pedro Nogueira Ramos & Geoffrey J.D. Hewings, 2012. "Inter-Regional Trade Flow Estimation Through Non-Survey Models: An Empirical Assessment," Economic Systems Research, Taylor & Francis Journals, vol. 24(2), pages 173-193, March.
    21. Schwarm, Walter R. & Jackson, Randall W. & Okuyama, Yasuhide, 2006. "An Evaluation of Method for Constructing Commodity by Industry Flow Matrices," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(1), pages 1-10.
    22. Auboin, Marc & Ruta, Michele, 2013. "The relationship between exchange rates and international trade: a literature review," World Trade Review, Cambridge University Press, vol. 12(3), pages 577-605, July.
    23. De Witte, K. & Verschelde, M., 2010. "Estimating and explaining efficiency in a multilevel setting: A robust two-stage approach," Working Papers 17, Top Institute for Evidence Based Education Research.
    24. Richard B. Andrews, 1953. "Mechanics of the Urban Economic Base: Historical Development of the Base Concept," Land Economics, University of Wisconsin Press, vol. 29(2), pages 161-167.
    25. Philip Mccann & John H. LL. Dewhurst, 1998. "Regional Size, Industrial Location and Input-Output Expenditure Coefficients," Regional Studies, Taylor & Francis Journals, vol. 32(5), pages 435-444.
    26. Olli Lehtonen & Markku Tykkyl�inen, 2014. "Estimating Regional Input Coefficients and Multipliers: Is the Choice of a Non-Survey Technique a Gamble?," Regional Studies, Taylor & Francis Journals, vol. 48(2), pages 382-399, February.
    27. Malte Jahn, 2017. "Extending the FLQ formula: a location quotient-based interregional input–output framework," Regional Studies, Taylor & Francis Journals, vol. 51(10), pages 1518-1529, October.
    28. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
    29. Boisso, Dale & Ferrantino, Michael, 1997. "Economic Distance, Cultural Distance, and Openness in International Trade : Empirical Puzzles," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 456-484.
    30. Julia Kowalewksi, 2015. "Regionalization of National Input-Output Tables: Empirical Evidence on the Use of the FLQ Formula," Regional Studies, Taylor & Francis Journals, vol. 49(2), pages 240-250, February.
    31. Lindall, Scott A. & Olson, Douglas C. & Alward, Gregory S., 2006. "Deriving Multi-Regional Models Using the IMPLAN National Trade Flows Model," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(1), pages 1-8.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amir Maghssudipour & Annalisa Caloffi & Marco Bellandi & Letizia Donati, 2022. "Language as a regional driver of the trade of place-sensitive products: The case of made-in-Italy goods," Working Papers - Economics wp2022_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    2. Sharada Nia Davidson & James Black & Kevin Connolly & Mairi Spowage, 2022. "Improving the Quality of Regional Economic Indicators in the UK: A Framework for the Production of Supply and Use and Input Output Tables for the Four Nations," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2022-14, Economic Statistics Centre of Excellence (ESCoE).
    3. Matthew S. Lyons, 2023. "The economic impact of COVID-19 on the creative industries: a sub-regional input–output approach," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-12, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mattia Cai, 2021. "Doubly constrained gravity models for interregional trade estimation," Papers in Regional Science, Wiley Blackwell, vol. 100(2), pages 455-474, April.
    2. Anthony T. Flegg & Guiseppe R. Lamonica & Francesco M. Chelli & Maria C. Recchioni & Timo Tohmo, 2021. "A new approach to modelling the input–output structure of regional economies using non-survey methods," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-31, December.
    3. Xesús Pereira-López & Napoleón Guillermo Sánchez-Chóez & Melchor Fernández-Fernández, 2021. "Performance of bidimensional location quotients for constructing input–output tables," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-16, December.
    4. Marek Radvanský & Ivan Lichner, 2021. "An alternative approach to the construction of multi-regional input–output tables of the Czech Republic: application of the CHARM method," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(4), pages 1083-1111, November.
    5. Johannes Többen & Tobias Heinrich Kronenberg, 2015. "Construction Of Multi-Regional Input--Output Tables Using The Charm Method," Economic Systems Research, Taylor & Francis Journals, vol. 27(4), pages 487-507, December.
    6. Lankhuizen, Maureen & Boonstra, Harm Jan & de Blois, Chris, 2020. "Unpacking freight – Identifying conditions driving regional freight transport in statistics," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 415-435.
    7. Oliver Krebs, 2018. "RIOTs in Germany – Constructing an interregional input-output table for Germany," Working Papers 182, Bavarian Graduate Program in Economics (BGPE).
    8. Cristian Mardones & Darling Silva, 2023. "Evaluation of Non-survey Methods for the Construction of Regional Input–Output Matrices When There is Partial Historical Information," Computational Economics, Springer;Society for Computational Economics, vol. 61(3), pages 1173-1205, March.
    9. José Daniel Buendía Azorín & Rubén Martínez Alpañez & Maria del Mar Sánchez de la Vega, 2022. "A new proposal to model regional input–output structures using location quotients. An application to Korean and Spanish regions," Papers in Regional Science, Wiley Blackwell, vol. 101(5), pages 1219-1237, October.
    10. Georgios Lampiris & Christos Karelakis & Efstratios Loizou, 2020. "Comparison of non-survey techniques for constructing regional input–output tables," Annals of Operations Research, Springer, vol. 294(1), pages 225-266, November.
    11. Kristinn Hermannsson, 2016. "Beyond Intermediates: The Role of Consumption and Commuting in the Construction of Local Input–Output Tables," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(3), pages 315-339, July.
    12. Andrzej Torój, 2016. "Regional Economic Impact Assessment with Missing Input-Output Data: A Spatial Econometrics Approach for Poland," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 8(2), pages 61-91, June.
    13. Yu. Yu. Ponomarev & D. Yu. Evdokimov, 2021. "Construction of Truncated Input–Output Tables for Russian Regions Using Location Quotients," Studies on Russian Economic Development, Springer, vol. 32(6), pages 619-630, November.
    14. Randall Jackson & Walter Schwarm, 2011. "Accounting foundations for interregional commodity-by-industry input-output models," Letters in Spatial and Resource Sciences, Springer, vol. 4(3), pages 187-196, October.
    15. Chris Bachmann & Chris Kennedy & Matthew Roorda, 2015. "Estimating regional trade flows using commercial vehicle survey data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 855-876, May.
    16. Zheng LU & Xiang DENG, 2017. "Regional Specialization: New Methods Of Measurement And The Trends In China 1987-2007," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 17(2), pages 119-134.
    17. Lampiris, Georgios & Karelakis, Christos & Loizou, Efstratios, 2018. "Evaluation of the impacts of CAP policy measures on a local economy: The case of a Greek region," Land Use Policy, Elsevier, vol. 77(C), pages 745-751.
    18. Satoshi Nakano & Kazuhiko Nishimura, 2013. "A nonsurvey multiregional input–output estimation allowing cross-hauling: partitioning two regions into three or more parts," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 935-951, June.
    19. Darlington Agbonifi & Daniele Cufari & Riccardo Magnani & Francesco Pecci & Federico Perali & Pasquale Lucio Scandizzo, 2023. "The Intra and Multi-Regional Impact of a Local PNRR Project using a Multi-Regional SAM Model of Italy," Working Papers 15, SITES.
    20. Gunnar Lindberg, 2011. "On the appropriate use of (input-output) coefficients to generate non-survey regional input-output tables: Implications for the determination of output multipliers," ERSA conference papers ersa10p800, European Regional Science Association.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:presci:v:99:y:2020:i:6:p:1583-1605. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.