Economic Ripple Effect Research Articles

지역산업연관분석을 활용한 동남권 연구개발투자의 경제적 파급효과

Based on the regional industry association table published by the Bank of Korea (as of 2015, July 2022), this study analyzed the economic ripple effect of R&D investment in the southeastern region of Korea (Busan, Ulsan, and Gyeongnam) on each region of the country and the economic ripple effect on individual industries in the southeast region. As a result of analyzing the economic effect of R&D investment in the southeast region on each region, it was found that the effect was the highest in the southeast region, which is its own region, in all sectors such as the production inducement coefficient, the value-added inducement coefficient, and the employment inducement coefficient, followed by the high economic ripple effect on the metropolitan area. In addition, as a result of analyzing the effect of R&D investment in the southeast region on each industry in the southeast region, it was found that the production inducement effect had a large ripple effect on the manufacturing sector, and the job creation effect had a large economic ripple effect on the service industry.

The TransIRIO model: Capturing the economic ripple effect of different economic behaviours in post-disaster emergency - Recovery - Reconstruction

Existing models for assessing the indirect economic impact of disasters typically focus on the economic impact of post-disaster reconstruction and ignore the repercussions of the periodic characteristics of disaster management; thus, these models rarely capture the full indirect economic impact of disasters. In response, this study develops the TransIRIO model, which captures the amplified impacts of emergency rescue, transportation interruption and reconstruction on demand during the emergency - recovery - reconstruction. The balancing of adaptive behaviours, such as creating an inventory buffer, price elasticity, import/export control strategies, and distribution optimization is explored, and the intelligent response behaviour of interregional industrial entities in post-disaster management is assessed. We apply the TransIRIO model to simulate the propagation of impacts across 31 provinces in mainland China following the 2008 Wenchuan Earthquake. Our results found that previous assessment models that did not consider specific social activities during emergency rescue underestimated the indirect economic impact of disasters to some extent, and that underscored the importance of incorporating the spatially distributed and networked characteristics of transportation systems into supply-demand chain-based economic models. This study not only presents a novel approach to economic modelling but also provides valuable insights for policymakers and researchers engaged in post-disaster recovery planning.

사회복지시설에 대한 지방세 감면의 정책 방향에 관한 연구

This paper is trying to examine the feasibility of local tax reduction for social welfare facilities from an economic perspective. In Korea, local tax reduction targets for social welfare facilities are divided into children's welfare facilities, youth welfare facilities, senior welfare facilities, the Korean Red Cross, and social welfare corporations. When local taxes are reduced in this way, the final demand for the facility increases and the income of the facility's workforce increases, resulting in an economic ripple effect. Based on this, the feasibility of the local tax reduction is analyzed.
 Although economic feasibility analysis is generally based on predictions of the size of local tax reductions, this study seeks to evaluate economic feasibility based on the added value generated by 1 won of local tax reduction. The added value induced by the increase in final demand due to this local tax reduction is less than 1 won. Additionally, this local tax reduction may increase labor costs, so if this is not reflected, economic feasibility will be underestimated. Accordingly, as a result of the analysis including the added value induced amount due to the increase in labor costs, the added value induced amount is greater than 1 won. Considering this, this system is evaluated as not valid in terms of economic feasibility. However, since social welfare facilities have the effect of promoting the welfare of the socially underprivileged, it is necessary to examine the validity of social welfare facilities based on equity.

대구·경북지역 핵심 제조산업의 지역경제 파급효과 분석

대구·경북지역 핵심 제조산업의 지역경제 파급효과 분석

Identifying the Role of Knowledge-Intensive Business Services in the Korean Economy as a Sustainable Innovation Tool Using Input–Output Analysis

This study aimed to determine the role of KIBSs as a tool for sustainable innovation in a country’s economic system. Specifically, the degree and role of their impact on the Korean economy were analyzed and compared for the entire KIBS sector, T-KIBSs (a new technology-based professional service), P-KIBSs (a traditional professional service), and every subsector. For this purpose, the demand inducement model, supply inducement model, and interlinkage effects method were applied using the 2019 input–output table published in 2022. The analysis showed that the indirect production inducement effect of the entire KIBS industry on other industries was KRW 0.800, the indirect added value inducement effect was KRW 0.330, and the supply disruption effect was KRW 1.144. For T-KIBS, the indirect production inducement effect was KRW 0.687, the indirect added value inducement effect was KRW 0.272, and the supply disruption effect was KRW 0.730. For P-KIBSs, the indirect production inducement effect was KRW 1.472, the indirect added value inducement effect was KRW 0.646, and the supply disruption effect was KRW 2.657. Finally, regarding the economic ripple effect of the KIBS subsector, legal and management support services and advertisements corresponding to P-KIBSs showed higher figures than the T-KIBS subsectors in all sectors, including production inducement, the added value inducement effect, and the supply disruption effect. These results revealed that in the South Korean economic system, KIBSs contribute to production and value addition across all industrial sectors. It is apparent that the absence of supply significantly disrupts other industries. Furthermore, production inducement effects are evenly distributed among all the KIBS subsectors in the secondary and tertiary sectors, while the value-added effects have a greater impact on the tertiary sector. In terms of the supply shortage effects, the secondary sector experiences a more significant impact. This underscores the crucial role of KIBSs in sustaining and enhancing overall economic activity in South Korea.

부산지역 사회인 야구리그의 경제적 파급효과 분석

The purpose of this study aims to identify the economic impact value of the community baseball club leagues, a representative daily sport in Busan, and present basic data for the development and revitalization of the leagues. A survey was conducted on 404 individual participants in the baseball leagues, and based on the valid data the production-inducing effects, value-added effects, and employment-inducing effects were identified using the index of 2015 input-output analysis. The results of this study are as follows. The production-inducing effect of the community baseball club leagues was about 33.46 billion won, the value-added effect was about 13.4 billion won, and the employment-inducing effect was 368.7 people/1 billion won. The economic ripple effect analysis data of the community baseball leagues in Busan presented in this study, is considered meaningful in revitalizing the local economy as well as local sports.

헬스케어 의료관광산업의 경제적 파급효과 비교분석

Purpose - This study aims to analyze the economic ripple effects of the new healthcare medical tourism industry, following the addition of healthcare to the scope of old medical tourism.
 Design/Methodology/Approach - As for methodology, the study divided the basic sectors (381) in the inter-industry relations table into the healthcare medical tourism industry through subtotal addition based on the 2023 KOSIS (extended data of 2019) of the National Statistical Office, reorganizing the inter-industry relations table with large integrated categories (34) and analyzing inter-industry relations with the I-O model.
 Findings - The findings show that the healthcare medical tourism industry had higher production and value-added inducement coefficients, and lower employment and hiring coefficients, than the overall industry average. Its impact coefficient and index of the sensitivity of dispersion, which represent the forward and backward linkage effects of the industry, were both high.
 Research Implications - In this study, an industry-related analysis was conducted by including the healthcare industry converging digital technology in medical tourism to differentiate it from previous studies, and the economic ripple effect was analyzed. The findings demonstrate that the healthcare medical tourism industry has impacts on other industries from multiple angles and, at the same time, is a new growth engine industry to contribute to national economic power and individual health as a high value-added industry.

Economic evaluation of MSY-based fishery policy using input-output table: A case study of squid-related industries in Hakodate City, Japan

This study evaluates the regional economic impact of the MSY-based fishery policy on the squid industry, specifically in case of the Japanese flying squid (Todarodes pacificus) in Hakodate-city, Hokkaido Prefecture by coupling ecological-economic modeling. The results show that a 10-year MSY-based squid fishery in Hakodate would have an economic ripple effect of approximately −0.085 billion JPY in the case of normal recruitment, and 0.061 billion JPY in the case of low recruitment both in the present value with 4% annual discount rate. In the viewpoint of percentage, they are less than 0.3% of the economic ripple effects of the conventional fisheries, which indicates that the economic impact of MSY-based fisheries is not that significant. In addition, the decreased catch values during the first five years are so huge that the total present value of the MSY-based fishery is negative in the normal recruit scenario. This suggests that MSY-based fisheries are effective in dealing with the risks of low recruitment and requires long perspectives on policy implications. This study also recommends high-level bilateral dialogue between Japan and China on squid fishery management to decrease the uncertainty on the stock assessment.

Assessing the Regional Economic Ripple Effect of Flood Disasters Based on a Spatial Computable General Equilibrium Model Considering Traffic Disruptions

With growing regional economic integration, transportation systems have become critical to regional development and economic vitality but vulnerable to disasters. However, the regional economic ripple effect of a disaster is difficult to quantify accurately, especially considering the cumulated influence of traffic disruptions. This study explored integrating transportation system analysis with economic modeling to capture the regional economic ripple effect. A state-of-the-art spatial computable general equilibrium model is leveraged to simulate the operation of the economic system, and the marginal rate of transport cost is introduced to reflect traffic network damage post-disaster. The model is applied to the 50-year return period flood in 2020 in Hubei Province, China. The results show the following. First, when traffic disruption costs are considered, the total output loss of non-affected areas is 1.81 times than before, and non-negligible losses reach relatively remote zones of the country, such as the Northwest Comprehensive Economic Zone (36% of total ripple effects). Second, traffic disruptions have a significant hindering effect on regional trade activities, especially in the regional intermediate input—about three times more than before. The industries most sensitive to traffic disruptions were transportation, storage, and postal service (5 times), and processing and assembly manufacturing (4.4 times). Third, the longer the distance, the stronger traffic disruptions’ impact on interregional intermediate inputs. Thus, increasing investment in transportation infrastructure significantly contributes to mitigating disaster ripple effects and accelerating the process of industrial recovery in affected areas.

Assessing the economic ripple effect of flood disasters in light of the recovery process: Insights from an agent-based model.

To assess the economic ripple effect, this study integrates agent-based modeling (ABM) with a multiregional input-output (MRIO) table to develop an assessment model that considers capacity recovery process. The intermediate and final demands in the MRIO table are used to describe the agents' interdependence. Survival analysis is used to construct capacity rate curves. By defining the first- and second-order ripple effects, ABM is used to capture the ripple process in days. To conduct a case study, the service and retail sectors in Enshi in Hubei, China, are selected as disaster-affected sectors (they were severely affected by the July 17, 2020 flood disaster). The main findings are as follows: (1) With the first-order ripple effect, the losses caused by service and retail are concentrated within Enshi. Enshi's final demand, construction, and raw materials manufacturing sectors as well as Wuhan's construction sector are seriously affected. (2) With the second-order ripple effect, the losses caused by the service and retail sectors expand, forming a prominent industrial ripple chain: "service (retail)-raw materials manufacturing-construction." (3) The direct and indirect losses caused by the service sector are more significant than those caused by the retail sector. However, the loss ratio of the service sector is smaller than that of the retail sector because of its sound industrial structure and strong resilience. Hence, the indirect losses caused by different sectors are not entirely determined by their direct losses; instead, they are also related to the degree of perfection of the structures of different sectors.

Integrating Agrivoltaic Systems into Local Industries: A Case Study and Economic Analysis of Rural Japan

The growing number of photovoltaic installations has created competition in land use between the need for electricity and food. Agrivoltaic systems (AVSs) can help solve this problem by increasing land use efficiency through the co-production of electricity and food. However, in Japan, where more than 2000 AVSs have been installed, some undesirable AVS cases have led to new problems. In this study, we developed an AVS installation model that is compatible with a regional society and limits the scale of AVS installation to a low-risk level. AVS projects have also entered local industrial clusters and stimulated the local economy. In this study, we used public information and geographic information systems to ensure quantifiability and applicability. The results revealed that the rural area targeted in this study had an AVS generation potential of 215% (equal to 17.8 GWh) of the region’s annual electricity consumption and an economic ripple effect of 108.9% (EUR 47.8 million) of the region’s gross regional product. Furthermore, the levelized cost of electricity was estimated to be 14.94–25.54 Euro cents/kWh under secure settings. This study provides solutions to food, economic, and energy problems in rural areas by promoting the installation of AVSs.

Categorization of prefectures based on the economic ripple effect of the construction sector

Categorization of prefectures based on the economic ripple effect of the construction sector

A Study on the Economic Ripple Effect Analysis and Development Plan of the establishment of a Blockchain Digital Asset Exchange for the Creation of a Financial Innovation Ecosystem: Fousing on Busan Metropolitan City

Purpose - This study examines how much economic ripple effect occurs by investing Busan Metropolitan City in construction and operation costs with a budget of 75 billion won to establish a Digital Asset Exchange. In addition, to the study presents a development plan through the establishment of an exchange.
 Design/Methodology/Approach - In order to analyze the economic ripple effect for the establishment of a digital exchange in the Busan, we intend to utilize the 2015 regional industry association table announced by the Bank of Korea. Through this study, we derive the production inducement effect, the value-added inducement effect, the import inducement effect, and the employment inducement effect, and examine how much output is induced with an input of 75 billion.
 Findings - With the Busan budget of 75 billion, the economic ripple effect showed more than 100 billion and more than 1,000 jobs in the short term.
 Research Implications - As a development plan, first, a special regulatory exception should be requested. Second, it is necessary to establish operational governance. Third, it is necessary to divide the scope of investors and investment targets into two stages from an asset point of view, implement them step by step and accumulate know-how.
 Research Implications - Detail.

The Economic Effect of the Steel Industry on Sustainable Growth in China—A Focus on Input–Output Analysis

The purpose of this study is to analyze the economic ripple effects caused by the supply-side reforms on China’s steel industry. To this end, using the 2012 and the 2017 China Input–Output Tables, this study analyzes the economic ripple effect of the Chinese steel industry caused by its supply-side reform. In this study, the influence coefficients (rear-linked effect) and the sensitivity coefficients (forward-linked effect), conceptualized by Leontief, are used as research tools to analyze the ripple effects of the Chinese steel industry. The analysis results are as follows. First, the fact that 2012 ranked high in professional equipment and meter manufacturing shows that the Chinese government’s supply-side reforms are effective and creating the required shift from traditional manufacturing to qualitative growth. Second, in terms of the sensitivity coefficient, in 2012, most of the top industries contributed significantly to the development of the Chinese economy. The originality of this study is as follows. The input production analysis used in this paper is a methodology mainly used in the steel, coal, automobile, and petrochemical industries, which clearly distinguishes the front and rear industries. Additionally, this study is a novel attempt at comparative research on the Chinese steel industry between 2012 and 2017.

Greenhouse Gas Cost and Economic Effect Analysis of Dairy Industry

This paper aims to identify greenhouse gas cost and economic effects between regions of dairy industry. For this purpose, we distinguished regional types (production areas, self-supporting areas, consumption areas) using milk production and milk consumption. In addition, livestock manure and greenhouse gas emissions by type of regions were calculated based on the recently revised 2019 IPCC Guidelines to analyze Regional-Environmental Input-Output Analysis. According to the analysis, the cost of greenhouse gas in the dairy sector in 2015 was 3.05% of the value added. The economic ripple effect considering the greenhouse gas cost of the dairy industry in 2015 was 1.723 trillion won in the dairy sector and 5.23 trillion won in the dairy product sector. The dairy sector in the production area has an economic effect of 296.5 billion won in the consumption area.

Quantitative Estimation of the Domestic Economic Ripple Effect of Foreign Disaster: The Case of China

In the past, damage from natural disasters was limited to the country directly affected, but as the world becomes one economic community, instances of damage spreading to other countries are increasing. Nonetheless, there has been insufficient research on the ripple effect of foreign disaster. This study thus analyzed the ripple effect on the domestic economy from foreign disaster, using a disaster scenario based on cases of China. The ripple effect was quantitatively calculated using an industry input coefficient. The results show that the direct damage was 0.08% of Gross Domestic Product (GDP), and the total amount of damage (including indirect damage) was 0.39% of GDP, thus demonstrating that foreign disaster could cause great damage to the domestic economy.

Analysis of AEO MRA’s Export Effect to Korea Using the CGE Model: Focusing on AEO MRA in Korea and Russia

Purpose - The purpose of this study was to predict AEO MRA effects in advance by analyzing the economic ripple effect of AEO MRA in Korea and Russia via CGE. Design/Methodology/Approach - Through the gravity model, we empirically analyzed the effect of Korea’s AEO MRA, and that effect was converted into a tariff equivalent value. Prediction analysis was conducted through CGE. Findings - As a result of analyzing the effects of the AEO MRA signed by Korea so far as a tariff equivalent value, it was estimated that there was a tariff reduction effect of 4.4%~8.8%, and using this value, the economic ripple effect of the Korea-Russia AEO MRA, which is currently expected to be signed, was investigated. In Korea, GDP was estimated to increase by about 0.008-0.012% and in Russia by 0.0015%-0.0029%, and most export items between the two countries were also analyzed to have a positive effect. Research Implications - Using CGE, this study conducted economic impact assessment which is limited in AEO MRA related studies and presented implications. In addition, it proposed one of the prediction analysis methods in AEO.

Economic ripple effect and implementation planof Inter-Korean railway cooperation project

본 연구의 목적은 남북철도의 경제적 파급효과를 분석하여, 남북철도협력사업의 정책적 시사점을 제시하는 것이다. 분석결과는 첫째, 남북철도 완공이후의 여객 운임의 생산량은 긍정적 남북관계에서는 10년 동안 약 115,666억 원이고, 부정적 관계에서는 27.23억 원으로 그 차이가 크다. 둘째, 남한의 10년 동안 경제적 파급효과는 긍정적 관계에서는 생산유발효과 3,080억 원, 부가가치유발효과 1,028억 원, 수입유발효과는 448억 원이며, 고용유발효과는 899명이다. 반면에 부정적인 남북관계에서는 생산유발효과 0.73억 원, 부가가치유발효과 0.24억 원, 수입유발효과는 0.11억 원이며, 고용유발효과는 0명이다. 남북철도협력사업의 성공적 운영을 위해서는 국제적인 민간투자, 국제적 협력, 법제도화, 안정적인 한반도 평화정착 등이 요구된다.

The Intra- and Inter-Regional Economic Effects of Smart Tourism City Seoul: Analysis Using an Input-Output Model

A competitive smart tourism city can be a solution for building resilience to address current and future crises and even be a booster of the economic effects of tourism, since it has an economic ripple effect both inside and outside of the city. This study tried to estimate the intra- and inter-regional economic effects of the smart tourism city Seoul, which has high competitiveness as a smart tourism city. First, this study tried to objectively clarify the scope of smart tourism based on a Delphi survey and then adopted the inter-regional input–output model. The results showed that smart tourism city Seoul is expected to create high income, high value-added, and job creation effects inside the city, and will greatly contribute to securing tax revenue. Outside of the city, smart tourism city Seoul is expected to induce high production effects. Based on these results, this study highlights the economic effects of a smart tourism city, which describes the convergence of technology and tourism.

Measuring Economic Ripple Effect by Log Export from Shibushi Port in Kagoshima Prefecture

Measuring Economic Ripple Effect by Log Export from Shibushi Port in Kagoshima Prefecture