Understanding of economic spillover mechanism by structural path analysis: a case study of interregional social accounting matrix focused on institutional sectors in Japan

Hidekazu Itoh

doi:10.1186/s40008-016-0052-9

Abstract

The aim of this research is to introduce a multiregional social accounting matrix (SAM) in Japan evaluating the regional and interregional spillover effects of economic impacts and to show the impact flows of economic linkages based on SAM. While research on national and regional SAM has become common, examples of interregional SAM are rare currently. This study points out that there is a substantial need to build a small regional and interregional SAM because of economic sensitivity. Our work evaluates the economic effects of national and regional government behavior, such as changes of the local tax system and decentralization of power, on the regional economy by structural path analysis. This research finds the differential impact flows of local government expenditures to regional incomes between a remote area and the rest of Japan (ROJ), or the leakages of remote area’s money to ROJ via property income.

Highlights

Input–output (I–O) analysis (Miller and Blair 1985), developed by the Russian economist Wassily W
The aim of this study is to introduce an analytical framework of interregional social accounting matrix (SAM) (ISAM) focusing on institutional sectors based on data availability in Japan
This study applied an ISAM with Hokkaido and rest of Japan (ROJ) based on the interregional I–O table for the year 2000 and national and prefectural economic accounting. This ISAM was built based on an Isard-type I–O table and considered in detail monetary exchanges of institutional sectors, especially local and central governments, social security funds, and some taxes and subsidies

Summary

Introduction

Input–output (I–O) analysis (Miller and Blair 1985), developed by the Russian economist Wassily W. I–O analysis is a systematic tool to analyze the relationship between industries through the production activities of each industry in a nation and region. To this day, the tool is used for empirical and advanced research. Because the main purpose of I–O analysis is to discuss the money flows or exchanges between only industries, this analysis does not consider all money flows, such as money exchanges with institutional sectors (household, company, and central and local governments) and fund flows with capital accounts (saving/investment).

Objectives

Results

Conclusion