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

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  • Anthony Flegg

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  • Timo Tohmo

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 delta in this formula. We also develop a regression model that can be used to select an appropriate value for delta. 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

  • Anthony Flegg & Timo Tohmo, 2011. "Regional Input-Output Tables and the FLQ Formula: A Case Study of Finland," ERSA conference papers ersa11p334, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa11p334
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    References listed on IDEAS

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    1. Tobias Kronenberg, 2009. "Construction of Regional Input-Output Tables Using Nonsurvey Methods," International Regional Science Review, , vol. 32(1), pages 40-64, January.
    2. Richard Harris & Aying Liu, 1998. "Input-Output Modelling of the Urban and Regional Economy: The Importance of External Trade," Regional Studies, Taylor & Francis Journals, vol. 32(9), pages 851-862.
    3. F J Harrigan & J W McGilvray & I H McNicoll, 1980. "Simulating the Structure of a Regional Economy," Environment and Planning A, , vol. 12(8), pages 927-936, August.
    4. 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.
    5. Geoff Riddington & Hervey Gibson & John Anderson, 2006. "Comparison of Gravity Model, Survey and Location Quotient-based Local Area Tables and Multipliers," Regional Studies, Taylor & Francis Journals, vol. 40(9), pages 1069-1081.
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    Cited by:

    1. Kowalewski, Julia, 2012. "Inter-industrial relations and sectoral employment development in German regions," HWWI Research Papers 127, Hamburg Institute of International Economics (HWWI).
    2. Kowalewski, Julia, 2012. "Regionalization of national input-output tables: Empirical evidence on the use of the FLQ formula," HWWI Research Papers 126, Hamburg Institute of International Economics (HWWI).
    3. Jeroen Klijs & Meghann Ormond & Tomas Mainil & Jack Peerlings & Wim Heijman, 2016. "A state-level analysis of the economic impacts of medical tourism in Malaysia," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 30(1), pages 3-29, May.
    4. Anthony T. Flegg & Timo Tohmo, 2011. "A comment on Tobias Kronenberg's "Construction of regional input-output tables using nonsurvey methods: the role of cross-hauling"," Working Papers 20111111, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    5. Kowalewski Julia, 2013. "Inter-industrial Relations and Sectoral Employment Development in German Regions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(4), pages 486-504, August.
    6. Uwe Blien & Friedrich Graef, 2013. "The ADETON method," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 33(2), pages 135-150, October.
    7. Jahn, Malte, 2015. "A location quotient-based interregional input-output (IRIOLQ) framework," HWWI Research Papers 161, Hamburg Institute of International Economics (HWWI).
    8. Karyn Morrissey, 2016. "A location quotient approach to producing regional production multipliers for the Irish economy," Papers in Regional Science, Wiley Blackwell, vol. 95(3), pages 491-506, August.

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