Interregional Input Output Research Articles

Regional Development and Greenhouse Gases Emission: The Case of the Amazon Region

This paper verifies the existence of possible tradeoffs between policies directed at reducing the emissions of greenhouse gases and those policies directed at fostering the development of the Brazilian Amazon Region, considering its economic relations with the rest of the country and international markets. To achieve this goal, this paper uses an interregional input–output model, estimated for the Brazilian economy for the year 2004. The results of our analysis show that the sectors with the greatest importance in terms of emissions are cattle and soybean production, which are also the most prominent for the region’s economic development. Although 63% of Brazil’s anthropogenic emissions of CO2eq were concentrated in the Amazon Region, under a consumer perspective the region’s responsibility corresponded to only 24% of emissions in the country, being surpassed by the consumer-based emissions of rest of Brazil (49%), as well as that belonging to foreign countries by means of exports (27%). This poses a dilemma that needs to be faced not only by Brazil but also by developed nations, as the burden of reducing emissions of greenhouse gases in the Brazilian Amazon region cannot be put only on the poor population of the region.

Estimation of interregional input–output table using hybrid algorithm of the RAS method and real-coded genetic algorithm

In this paper, we propose a method for improving the accuracy of the estimation of interregional input–output tables, by combining the RAS method and the real-coded Genetic Algorithm (GA); these are simple representative methods for the estimation of an interregional input–output table. By comparing the performance evaluation results obtained using the proposed method, the RAS method, and Simulated Annealing, we verified that the combination of the genetic algorithm and the RAS method can enhance the estimation accuracy of an interregional input–output table. In addition, performance is further enhanced by adjusting GA parameters.

Tourism and regional development in the Brazilian Northeast

This article aims to estimate the economic impacts of expenditure on tourism in the Brazilian Northeast and its effects on the states’ productive structure and regional inequalities. We use an interregional input–output matrix for the nine northeastern states and the rest of Brazil. The main results show that tourist expenditure in the Northeast was responsible for a 3.9% increase in the Northeast’s gross domestic product (GDP). Additionally, the sectorial analysis indicated significant spillover effects to the rest of Brazil, especially from manufacturing industries. On the other hand, tourist spending contributed to reducing regional inequalities.

Electricity-savings pressure and electricity-savings potential among China’s inter-provincial manufacturing sectors

The Inter-Regional Input Output (IRIO) model is developed in 11 manufacturing sectors of China’s 30 provincial-level regions. Against the background of electricity pricing and energy-savings, this paper develops and compares the relative sectoral and regional price sensitivities to electricity price and elasticities to electricity demand. The results show that industries such as metal smelting, oil and chemical processing are more sensitive to increasing electricity prices, and have a higher potential of energy-savings. Remarkable findings hold for the regions of Tianjin, Hebei, Jilin, Guangdong, Zhejiang, Shaanxi and Shandong.

China’s Inter-Regional Trade of Virtual Water — A Multi-Regional Input–Output Table Based Analysis

The success of China’s economic development has brought increasing pressures on its water resources, motivating it to better understand water use characteristics and how scarce water resources are transferred among regions. Virtual water is a term used to refer to the volume of freshwater consumed for producing traded goods and services. It reflects the actual human consumption of water resources and therefore is important for water resources management. The goal of this paper is to evaluate the current inter-regional virtual water trade (VWT) structure and to assess the implications of these trade patterns for water use and water conservation strategies in China. Based on the most recently available multi-regional input–output (MRIO) data, we have developed an extended inter-regional input–output (IRIO) model for eight economic regions in China to account for virtual water flows. The findings show that water use efficiency has increased over the years, but it is still unbalanced among the regions. The total amount of VWT has increased, and the major source of the trade is domestic inter-regional trade, especially intermediate products trade. Moreover, the main direction of virtual water transfer is from water-poor inland regions to water-rich regions, which is unfavorable for water resource allocation and efficiency. Therefore, in addition to enhancing water use efficiency and encouraging water-saving production alternatives, we suggest that China’s government should also adopt a market-based water pricing system.

Beyond Intermediates: The Role of Consumption and Commuting in the Construction of Local Input–Output Tables

Estimating intermediate trade using conventional non-survey methods produces biased results. This problem has led to a methodological recommendation that emphasizes the accurate estimation of intermediate trade flows. This paper argues for a qualification of the consensus view: when simulating input–output (IO) tables, analysts need also to consider spillover effects driven by wage and consumption flows. In particular, for metropolitan economies, capturing wage and consumption flows is essential to obtain accurate Type II multipliers. This is demonstrated by constructing an interregional IO table that captures the interdependence between a city and its commuter belt, nested within the wider regional economy.

Networked or Un-Networked? A Preliminary Study on KIBS-Based Sustainable Urban Development: The Case of China

Increasingly pertinent linkages of cities via knowledge intensive business services (KIBS) in the 21st century have opened a new window for academia to reconsider the approach to achieving urban sustainability. In this study, city network was investigated with an aim of identifying its attributes in the framework of sustainable urban development. Data about China’s KIBS, which are compiled in an inter-regional input–output table, were calculated following the procedure of social network analysis. It was found that: (1) the degree of nodes (i.e., out-degree, in-degree and betweenness) in China varies distinctively from city to city; (2) the hierarchy of the city network is very tiny; and (3) that the network structure is subject to both “a small world” and core–periphery effects. Furthermore, city nodes in China fall into four categories, namely high centrality and power, high centrality and low power, low centrality and high power, and low centrality and power. The implication is that governmental efforts should be made to secure a reasonable decentralization of key city nodes to ensure that urban sustainability is built on a city-to-city basis.

Spatial and sectoral characteristics of China’s international and interregional virtual water flows – based on multi-regional input–output model

ABSTRACTThis paper provides a systematic analysis of spatial and sectoral characteristics and changes in virtual water flows associated with China’s interregional and international trade based on the China interregional input–output tables of 2002 and 2007. The results show significant improvement in water use efficiency between 2002 and 2007. However, the general spatial patterns and sectoral components of virtual water flows have more or less remained during the period. Almost all Chinese provinces are net exporters of virtual water in international trade. In interregional trade, the dominant direction of virtual water flow is from peripheral provinces to eastern coastal provinces. The agricultural sector plays an important role in shaping this direction and has significant impacts on water uses in exporting provinces, some of which are water scarce. The results of this study clarify some confusions concerning mismatches between regional water endowments and virtual water trade within China and with other countries.

The phenomenon of collective foresight as a byproduct of regional strategic planning

The quality of strategies for socioeconomic development in federal subjects are analyzed as well as the opportunities arising due to their availability for regional economic research, in particular for assessing the soundness of optimistic expectations and validity of forecasts for regional economic growth. A forecast of Russia’s economic growth was constructed based on separate regional strategies, and its basic parameters were assessed. The forecast results from regions’ “collective foresight” are verified. The study is based on materials of publicly available strategies of socioeconomic development drawn up by federal subjects for the period up to 2020–2030. The research methods include collection and systematization of forecasts developed as part of the strategies; bringing of the expected results of implementation of strategies to a comparable form and their aggregation by federal districts; comparative analysis of the consolidated forecasts for federal districts with a comprehensive forecast for Russian economic development based on the interregional input–output model. It is found that optimistic expectations in the forecast for gross regional product growth often lead to overstated estimates that do not coordinate with the required investment. The attainability of the predicted estimates for regional economic development was assessed by spatial input–output model, which can take into account resource constraints and effects of interregional and intersectoral interactions on a nationwide scale. Moderate forecasts are more characteristic of subjects with high levels of economic development. The extent of predominance of excessively optimistic projections over balanced forecasts is indicative of interregional competition for investment resources. The extent of a deficit of labor resources can be estimated by comparing the consolidated demographic forecast and the existing Rosstat forecast.

Microsimulation and interregional input–output modelling as tools for multi-level policy analysis

This article addresses the differentiated impacts of various sectors and branches in a multi-layer spatial system. The key question is whether in an interdependent spatial system – comprising a local, regional and national component – one or more core industries or sectors can be identified that may act as strategic handles for long-range sustainable development of a local economy. As a case study, the Cairngorms National Park in Scotland is used. In this area, policy makers – at different administrative levels – strongly emphasize the need for new sustainable economic development. We use a novel combination of stakeholder analysis (with household questionnaires) and multi-level interregional input–output analysis to identify which critical local key sectors are acting as carriers for local sustainability. The methodological vehicle employed in our study is based on microsimulation, as a tool to cope with limited data availability. This paper demonstrates how, even for small areas such as the Cairngorms National Park in Scotland, survey information combined with secondary data and existing input–output tables can be integrated into a useful policy toolbox for local sustainable development in a broader regional-national context.

Foreign exports, net interregional spillovers and Chinese regional supply chains

AbstractThis study develops a method to decompose total national indirect value added effects (induced by final demand) into intraregional effects and interregional spillovers. The decomposition is applied to China's 2002 and 2007 interregional input–output tables with foreign‐owned processing exports separated from normal exports. First, we find that interregional spillovers account for one quarter to one half of the total national indirect value added multipliers in 2007, with the largest spillovers occurring for the coastal regions. This finding is important when explaining regional value added generation and thus has real implications for regional policy programmes. Second, we develop a new measure, namely, ‘net interregional value added spillovers’ to position China's individual regions in the global production chains. This measure shows that upstream regions in the Centre, Northwest and Southwest of China are net recipients of interregional value added spillovers generated by foreign exports in coastal regions. Over time, this observation becomes more pronounced.

Regional water footprint evaluation and trend analysis of China—based on interregional input–output model

On the basis of the interregional input–output model, we calculate the regional water footprint of China in 2002 and in 2007, and analyze the changing trend of the water footprint. We find that: firstly, the water footprint for each region changed significantly from 2002 to 2007. Specifically, in 2002 the water footprints for the central, eastern coastal, southwest, northwest, southern coastal, northeast, northern coastal and Beijing–Tianjin regions were decreasing one by one; however, in 2007 those for the central, southwest, eastern coastal, southern coastal, northern coastal, northeast, Beijing–Tianjin and northwest regions were decreasing one by one. Secondly, the direction of domestic trade for regional virtual water in 2002 was not consistent with that in 2007. In 2002 the regions which had net export of virtual water were the southern coastal, central, northwest and southwest, while in 2007 those were the northeast, Beijing–Tianjin and northwest regions. Thirdly, China's virtual water trade patterns were inconsistent with the virtual water trade strategy in 2002 or 2007. Some regions such as the Beijing–Tianjin region were short of water, but they had virtual water transferred out. Fourthly, the agricultural sector has the largest water footprint. These results imply that China needs to improve the water use efficiency and readjust the pattern of virtual water trade. Besides, optimizing the sectoral distribution and structure among the regions is an essential measure for China.

Interregional transfer of polluting industries: a consumption responsibility perspective

The economy and the environment are like two sides of a coin: it seems as if we cannot get both simultaneously, as the transfer of polluting industries shows such a paradox between the two sides that it promotes economic development while it may cause pollution transfer and diffusion. This paper tries to evaluate some basic issues facing interregional transfer of polluting industries in China: how to define polluting industries adequately, what benefits accrue from the transfer status and whether there are some rules governing this situation. Initially, a pollution intensity index is calculated which considers industrial waste emissions of solids, liquids, and gases to avoid the difficulty in confirming overall masses of each kind of pollution when we try to aggregate different pollution indices, we then measure the transfer of these polluting industries among the eight regions of China with the help of an input–output model and interregional input–output tables to analyse the polluting industrial transfer trends from 1997 to 2007 in China. We find that there are eight industrial sectors that can be defined as polluting industries according to the interregional input–output table with seventeen sectors, including: mining and dressing, food production and tobacco processing, garments and textile, etc. Generally, polluting industries mainly transfer from the eastern coastal areas to the western and northern inland areas that render the northwest and northeast the major polluting industries recipients. We also find that some polluting industries transfer from eastern regions to both northwest and southwest directly, instead of via midland regions in China. Anti-gradient transfer arises in some polluting industries which transfer from the midlands and southwest at a lower industrial gradient to southern coastal areas that operate under a higher industrial gradient.

THE COMPILATION OF CHINA'S INTERREGIONAL INPUT–OUTPUT MODEL 2002

The increasing economic interaction among various regions in China makes the construction of an interregional input–output table relevant for economic studies. This paper elaborates the model compilation procedure of the China Interregional Input–output model 2002. The key features of the model compilation include: (1) using representative commodities to estimate the interregional commodity flows of the primary industries; (2) adopting functions to estimate the decreasing interregional transportation of manufacturing sectors in relation to distance and (3) selecting appropriate indicators to estimate the interregional commodity flows of non-material sectors. This study is an initial attempt in interregional input–output modelling and might be helpful for economic studies at the levels of micro-regions.

ECONOMIC IMPLICATIONS OF POLICY RESTRICTIONS ON WATER WITHDRAWALS FROM SURFACE AND UNDERGROUND SOURCES

The appropriation of water for economic activities is limited by regional surface and underground endowments, and symptoms of environmentally unsustainable withdrawals are already visible in many regions of the world. In this paper we investigate the economic implications of water policy imposing source- and region-specific restrictions on water withdrawals taking the Mexican economy as a case study. We use an inter-regional input–output model of Mexico's hydro-economic regions to allocate production subject to the availability of water and other factors of production. Water sustainability requires a reduction of 7.5 km3/yr of groundwater withdrawals, which is compensated by an increase of 3.4 km3/yr of surface water, an expansion onto an additional 1.4 million hectares of rainfed land, and modifications in subnational patterns of food trade. This framework for evaluating scenarios describing sustainability-oriented water policies is readily applicable to other regions.

Determining optimal location of new growth centers based on LGP–IRIO model to reduce regional disparity in Indonesia

Development policy that mainly focuses on economic growth has triggered increasing regional disparity in Indonesia, exacerbated by the concentrated development of growth centers that generate backwash effects rather than spillover effects. Balanced regional development is needed and can be initiated through a spatial system approach, where the growth centers and their hinterlands are developed simultaneously as an integrated system. The aim of this research is to define new growth centers that can stimulate the optimal utilization and interaction between regional resources for generating more balanced and efficient development. Three interrelated models are developed to address this: (1) an inter-regional input–output (IRIO) optimization model to generate optimal resource use and improve development performances, (2) a transport model to determine an optimal inter-regional input–output network, and (3) a P-median model to define new growth centers and their hinterland areas. Results from the first model show that setting land resource limitations, demand compliance, and goals to increase economic growth, people’s income, and government tax can create higher and equally distributed value of total output. The second model indicated that the optimal flow of input–output increased intensity of economic transaction among provinces, although it was still dominated by interaction between Java and Sumatra. The third model identified seven new growth centers comprising Medan, Tanjungpinang, Palembang, Balikpapan, Gorontalo, Makassar, and Ternate.

Trade Effects of Specialization in Tourism: An Inter-Regional Input—Output Model of the Balearic Islands

The authors construct an inter-regional input–output model that combines both national and regional data to isolate the effects of changes in demand by their regional nature using an additive decomposition. The model is used to quantify the backward linkages of the top industries in the Balearic Islands (a European region heavily specializing in tourism) with other industries, both within the region and in the rest of Spain. The results confirm the importance of local industries in terms of backward linkage effects, but also reveal that only 55% of these effects stay in the region, while the rest leak out to the rest of the country due to the extraordinary dependency on supplies created by this specialization.

Uncovering regional disparity of China's water footprint and inter-provincial virtual water flows

With rapid economic development in China, water crisis is becoming serious and may impede future sustainable development. The uneven distribution of water resources further aggravates such a problem. Under such a circumstance, the concepts of water footprint and virtual water have been proposed in order to respond water scarcity problems. This paper focuses on studying provincial disparity of China's water footprints and inter-provincial virtual water trade flows by adopting inter-regional input–output (IRIO) method. The results show that fast developing areas with larger economic scales such as Guangdong, Jiangsu, Shandong, Zhejiang, Shanghai and Xinjiang had the largest water footprints. The most developed and water scarce areas such as Shanghai, Beijing, Tianjin and Shandong intended to import virtual water, a rational choice for mitigating their water crisis. Xinjiang, Jiangsu, Heilongjiang, Inner Mongolia, Guangxi and Hunan, had the largest per GDP water intensities and were the main water import regions. Another key finding is that agriculture water footprint was the main part in water footprint composition and water export trade. On the basis of these findings, policy implications on agriculture geographical dispersion, consumption behavior changes, trade structure adjustment and water use efficiency improvement are further discussed.

REGIONAL WATER FOOTPRINTS OF THE YANGTZE RIVER: AN INTERREGIONAL INPUT–OUTPUT APPROACH

Recently, researchers have applied the multi-regional input–output (MRIO) approach to water footprint (WF) analysis. The concept of interregional input–output (R-MRIO) was developed to analyse regional issues. Researchers have concentrated on the development of global or international input–output (N-MRIO) tables. Using the N-MRIO and the R-MRIO approach allows the study of global and regional issues, respectively. The WF is an indicator influenced by trade among nations and regions. However, the treatment of imports in an R-MRIO approach differs in whether international imports are separated or combined. We evaluate the effects of the difference between these models and discuss policy implications for the Yangtze River, China. The WF calculated using the combined type model is 11% larger than that by the separated type model. This difference can be ascribed to international imports, mainly internal consumption and interregional trade. We find that this difference affects social equity in water-abundant areas.

Relations of the Regional Cane Agroindustry with the National Economy: Analysis Applied to the Center-South and North-Northeast

Cane, sugar and ethanol production in Brazil has been divided between two major production regions, the Centre-South (CS) and the North-Northeast (NNE), which present very different productivity, and henceforth production costs. The CS average productivity is more than 72 tonnes of cane per hectare, while average productivity in the NNE is 49 tonnes per hectare. The objective of the study was to establish interrelations between the cane agro-industry and other regional sectors and with the overall Brazilian economy. This framework was used to compare a demand impact upon regional cane production upon the regional and the overall Brazilian economy. An interregional input–output matrix was used to characterize how regional demand impacts on both regional and overall Brazilian economies. Rasmussen–Hirschman indexes, together with a pure linkage index were used for the analysis. In addition, production multipliers, with and without considering endogenous family consumption were estimated. The results showed t...