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Application of the Input-Output Decomposition Technique to China's Regional Economies

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  • Meng, Bo
  • Chao, Qu
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Abstract

Structural decomposition techniques based on input-output table have become a widely used tool for analyzing long term economic growth. However, due to limitations of data, such techniques have never been applied to China's regional economies. Fortunately, in 2003, China's Interregional Input-Output Table for 1987 and Multi-regional Input-Output Table for 1997 were published, making decomposition analysis of China's regional economies possible. This paper first estimates the interregional input-output table in constant price by using an alternative approach: the Grid-Search method, and then applies the standard input-output decomposition technique to China's regional economies for 1987-97. Based on the decomposition results, the contributions to output growth of different factors are summarized at the regional and industrial level. Furthermore, interdependence between China's regional economies is measured and explained by aggregating the decomposition factors into the intraregional multiplier-related effect, the feedback-related effect, and the spillover-related effect. Finally, the performance of China's industrial and regional development policies implemented in the 1990s is briefly discussed based on the analytical results of the paper.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/552/3/ARRIDE_Discussion_No.102_meng.pdf
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Bibliographic Info

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 102.

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Date of creation: Apr 2007
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Publication status: Published in IDE Discussion Paper. No. 102. 2007.4
Handle: RePEc:jet:dpaper:dpaper102

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Related research

Keywords: Input-Output; Decomposition; Economic growth; China; Local economy; Imput-output tables;

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References

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  1. Wolff, Edward N., 1994. "Productivity measurement within an input-output framework," Regional Science and Urban Economics, Elsevier, vol. 24(1), pages 75-92, February.
  2. Boer, P.M.C. de, 2006. "Structural decomposition analysis and index number theory: an empirical application of the Montgomery decomposition," Econometric Institute Report EI 2006-39, Erasmus University Rotterdam, Econometric Institute.
  3. Brun, J. F. & Combes, J. L. & Renard, M. F., 2002. "Are there spillover effects between coastal and noncoastal regions in China?," China Economic Review, Elsevier, vol. 13(2-3), pages 161-169.
  4. Erik Dietzenbacher & Bart Los, 1998. "Structural Decomposition Techniques: Sense and Sensitivity," Economic Systems Research, Taylor and Francis Journals, vol. 10(4), pages 307-324.
  5. Dietzenbacher, Erik & Hoen, Alex R, 1998. "Deflation of Input-Output Tables from the User's Point of View: A Heuristic Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 111-22, March.
  6. Round, Jeffrey I, 1985. "Decomposing Multipliers for Economic Systems Involving Regional and World Trade," Economic Journal, Royal Economic Society, vol. 95(378), pages 383-99, June.
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Cited by:
  1. Marco Antonio Márquez Mendoza, 2012. "Efectos de derrame y de retroalimentación industrial en América del Norte: un enfoque nacional e internacional," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 1-34, May.

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