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Regional Input-Output Tables and the FLQ Formula: A Case Study of Finland (revised)

Author

Listed:
  • Tony Flegg

    (Department of Economics, University of the West of England)

  • T. Tohmo

    (School of Business and Economics, University of Jyvaskyla, Finland)

Abstract

This paper examines the use of location quotients (LQs) in constructing regional input?output tables. Its focus is on the modified FLQ formula proposed by Flegg and Webber (1997). Using data for 20 Finnish regions, ranging in size from very small to very large, we determine appropriate values for the unknown parameter d in this formula. We also develop a regression model that can be used to help select an appropriate value for d. We find that the FLQ yields results far superior to those from standard LQ-based formulae. Our findings should be very helpful to any regional analyst who is contemplating making use of the FLQ formula to generate an initial set of regional input?output coefficients. These coefficients could be used either as part of the RAS procedure or as the non-survey foundations of a hybrid model. We consider possible improvements to the FLQ formula but find that including a regional specialization term in this formula only marginally enhances its performance. On balance, we would recommend using the original FLQ formula.

Suggested Citation

  • Tony Flegg & T. Tohmo, 2010. "Regional Input-Output Tables and the FLQ Formula: A Case Study of Finland (revised)," Working Papers 1005, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    • Handle: RePEc:uwe:wpaper:1005
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    File URL: http://carecon.org.uk/DPs/1005.pdf
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    Cited by:

    1. Institut für Wirtschaftsforschung Halle (Ed.), 2013. "Neuere Anwendungsfelder der Input-Output-Analyse: Beiträge zum Halleschen Input-Output-Workshop 2012," IWH-Sonderhefte 1/2013, Halle Institute for Economic Research (IWH).
    2. Lu, Zheng & Flegg, A.Tony & Deng, Xiang, 2011. "Regional specialization: a measure method and the trends in China," MPRA Paper 33867, University Library of Munich, Germany.
    3. Sunggoan Choi, 2013. "Revealing the Growth Potentials with Input-Output Model at Sub-national Level," ERSA conference papers ersa13p73, European Regional Science Association.
    4. 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.

    More about this item

    Keywords

    Regional input-output tables Finland FLQ formula Location quotients Input coefficients Multipliers Hybrid models;

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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