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Identifying Optimal Sector Groupings With The Hypothetical Extraction Method

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  • Umed Temurshoev

Abstract

ABSTRACT We formulate the problems of finding a key sector and a key group of sectors in the economy by the hypothetical extraction method (HEM), and derive their analytic solutions that are termed industries’ factor worths. It is shown that the key group of k ≥ 2 sectors is, in general, different from the set of top k industries selected on the basis of the key sector problem, the issue which is totally ignored in the input–output (IO) linkage literature. Further, the related problems of finding a key region and a key group of regions in an interregional IO setting are discussed. We also examine how a change in an input coefficient affects the factor worth of an industry. The key group problem is applied to the Australian economy for factors of water use, CO2 emissions, and generation of profits and wages.

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  • Umed Temurshoev, 2010. "Identifying Optimal Sector Groupings With The Hypothetical Extraction Method," Journal of Regional Science, Wiley Blackwell, vol. 50(4), pages 872-890, October.
  • Handle: RePEc:bla:jregsc:v:50:y:2010:i:4:p:872-890
    DOI: 10.1111/j.1467-9787.2010.00678.x
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    File URL: https://doi.org/10.1111/j.1467-9787.2010.00678.x
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    Cited by:

    1. Oosterhaven, Jan, 2017. "Key Sector Analysis," Research Report 17015-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
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    3. Shen, Zhesi & Yang, Liying & Pei, Jiansuo & Li, Menghui & Wu, Chensheng & Bao, Jianzhang & Wei, Tian & Di, Zengru & Rousseau, Ronald & Wu, Jinshan, 2016. "Interrelations among scientific fields and their relative influences revealed by an input–output analysis," Journal of Informetrics, Elsevier, vol. 10(1), pages 82-97.
    4. Randall Jackson, 2015. "Fellows Address: Are Industry Clusters and Diversity Strange Bedfellows?," Working Papers Working Paper 2015-04, Regional Research Institute, West Virginia University.

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