Interregional Input-output Table Research Articles

Provincial marine carbon sink transfer in China: structural drivers and key consumption pathways

The ocean is the largest carbon sink on Earth and an important pathway to China achieving carbon neutrality. From a consumption perspective, studying the capacity of marine carbon sink in each of China’s provinces and its inter-regional transfer is of great significance in harnessing the increase in ocean carbon sink driven by final demand. This article first calculates the production-side carbon sink in coastal provinces. Then, based on the 2007, 2012, 2015, and 2017 Chinese inter-regional input-output tables, each province’s consumption-side marine carbon sink is calculated. The article further examines the influencing factors and key transfer paths for the growth of marine carbon sink through Structural Decomposition Analysis (SDA) and Structural Path Analysis (SPA) methods. The results show that each province’s total consumption-side carbon sink continues to rise, with significant regional disparities, demonstrating a trend of higher carbon sink in coastal provinces than inland provinces. Among the nine coastal provinces, Hainan and Guangdong are in a net input state regarding carbon sink transfer, while the other seven are in a net output state. SDA results indicate that the carbon sink intensity effect and the consumption demand effect are important factors inhibiting and promoting carbon sink growth, respectively, while the influence of the input-output technical effect is weak and variable. SPA analysis reveals that carbon sink outputs are primarily transferred to the food and tobacco sector, the agricultural and forestry products and services sector, and the wood processing and furniture industry. The key transfer paths mostly occur within a province, with a relatively small proportion of interprovincial transfer paths. Based on the research findings, this article suggests steadily increasing the proportion of marine product consumption, actively expanding the value chain of shellfish and seaweed industries, continuously strengthening coordination between land and marine industries, and further promoting the domestic circulation of marine carbon sinks.

Asymmetric trade costs, domestic value chains and global value chains in China: mechanism and effect assessment

Previous research mostly evaluates global value chain embeddedness at the country level rather than considering the expansions of global value chains at the regional level within a country, and pays little attention to the mechanism linking global value chains and domestic value chains. Therefore, a substantial part of the variation in global value chain embeddedness at the regional level remains unexplained. Using Chinese interregional input-output tables in 2002, 2007, 2010, and 2012, this study investigates the impact of the asymmetric trade cost on global value chain embeddedness in China, and the underlying interaction mechanisms between domestic value chains and global value chains. The findings show that the asymmetric trade cost may widen the gap in the degree of global value chain embeddedness between bilateral trade regions, which unveils the variation in global value chain embeddedness at the regional level from the perspective of the asymmetric trade cost. Furthermore, domestic value chains may promote global value chains through improving collaboration, reducing transaction costs, and enhancing industrial competitiveness. In closing, this study reveals that the exacerbating effect of asymmetric trade costs on the disparity in global value chain embeddedness among regions becomes more pronounced in the presence of a significant gap in domestic value chain integration.

Economic Simulation of Central Java: Indonesia’s Province-Based IRIO Analysis

This study simulates increased sectoral investment in the economy of Central Java Province, Indonesia. Using output and household income indicators, several policy scenarios are applied to Indonesia's interregional input-output (IRIO) tables, including green economic scenarios. The aim of this research is to identify the most impactful policy on the economy of Central Java based on the results of investment policy simulations. Investment injections are conducted in production sectors within Central Java and in sectors outside the province. By assessing the direct, indirect and induced effects on economic sectors and households, cross-sectoral insights for regional development policies, the simulation results show that the Central Java economy experiences the best impact in terms of sectoral household output and income levels. In IRIO analysis, this impact is seen as a multiplier effect from sectors within and beyond Central Java. The findings imply that policies focused on local sector development will generate the highest income levels and largest output multiplier for Central Java given the existing economic conditions, while green economic policies do not have insignificant economic impacts compared to non-green policies. It is crucial to develop additional policy scenarios targeting both local and non-local industries to obtain more sensitive simulation results.

Economic Transformation: How Does the Agricultural Sector Performance in Indonesia's Regional Economic Structure?

This study aims to analyze the performance of the agricultural sector on the structure of the regional economy in Indonesia. The data used is secondary data in the form of the 2016 Indonesian Inter-Regional Input-Output Table, classified for 52 sectors and 34 provinces. Contribution analysis in the IRIO approach is used to answer research objectives. The research results show that the agricultural sector in producing output, allocating input to other sectors, providing final demand, absorbing the output of other sectors, and forming primary input in each region in Indonesia has different contributions. These different contributions are adjusted to the resource potential of each region. In particular, the agricultural sector in North Maluku Province has a significant role in the economic structure of North Maluku. The North Maluku agricultural sector has a contribution in producing output, providing final demand, absorbing intermediate inputs, and forming primary inputs that are higher than the average contribution of other provinces in Indonesia.

Characteristics and Influencing Factors of Provincial Industrial Convergence Networks in China

Abstract The 20th National Congress of the Communist Party of China proposed accelerating the promotion of Chinese-style modernization, placing higher requirements on regional economic development. In this context, interregional industrial convergence has become a new driving force for achieving high-quality economic development and regional industrial transformation and upgrading. Using the 2017 interregional input-output table provided by Carbon Emission Accounts and Datasets (CEADs), this study constructs a directed weighted network from both the supply side and the demand side, with “province-industry” as the node and the real flow between industries as the edge weight. Network analysis is used to investigate the overall status of industrial convergence in China, as well as differences according to industry and region. Finally, an exponential random graph model (ERGM) is used to examine the influencing factors and effects of network formation. The results show the following: (1) the industrial convergence relationship between regions in China is transitive and reciprocal, and the overall tendency of the network is one in which output capacity is greater than absorption capacity. (2) The marginal flow of manufacturing and services occupies an absolute advantage in China’s industrial convergence network, in which mid-end manufacturing and producer services are the most prominent. (3) Industrial convergence between provinces has formed a hierarchical spatial layout of “output-conduction-absorption”. In the absorption layer, the breadth and depth of Beijing’s industrial integration are characterized by absorption-dominant development. In the output layer, Shanghai’s capital-intensive industries have a strong external radiation capacity and generally show open-led development. (4) Interregional industrial convergence tends to occur in areas with similar economic levels and output value levels, showing a coordinated development trend of high-level output and low-level absorption, which is also affected by location proximity relationships, regional technology gaps, and employment population gaps. This research shows that China’s inter-provincial industrial convergence network generally shows the characteristics of spatial hierarchy, significant industry differences and multi-factor drivers.

The European regions in the global value chains: New results with new data

AbstractThis article contains the methodology and main results related to the update and extension of the widest interregional input–output tables for the entire EU27, UK and the European Free Trade Association (EFTA) countries. This work continues the outstanding effort developed in the past years regarding the estimation and analysis of different multiregional input–output (MRIO) databases at the country level (world input–output database, EXIOBASE, ICIO, FIGARO, etc.) and the MRIO tables developed for the European Union (EU) at the NUTS2 level. The main contribution consists of updating and extending the current EUREGIO collection to obtain a EUREGIO table for 2017, which will be referred (NUTS‐2 Rev.2016) for all the EU27 + UK + EFTA countries and will be embedded in the new FIGARO multicountry 2017. Such effort was developed in the context of the ESPON‐IRIE project. This article summarises the methodology used and compares the results obtained with the ones of the main benchmarks, providing an analysis of the national and regional participation in the global value chains (GVCs). The main results suggest that, on average, 65% of value added is embodied in the goods and services sold to the same NUTS‐2 region, 16% is embodied in the ones sold to regions in the same country and the remaining 20% is exported (to other countries). Exploring the heterogeneity within these figures can also be seen that the variety is higher across regions than across sectors. Our analysis suggests that, to a large extent, the heterogeneous participation of EU27 + UK + EFTA regions in the GVCs is explained by their sectoral structure more than by the regional idiosyncratic characteristics. Such results open the floor for the correct design of industrial policies, embedded in the smart specialisation paradigm.

Input-output analysis: Revenue facilites in Batam, Bintan and Karimun free trade zone

Indonesia has four regions declared as free trade zone, which is Sabang, Batam, Bintan, and Karimun. However, Government Regulation Number 41 2021 only puts a lot of focus in the development of Batam, Bintan and Karimun. This study aims to see the impact of free trade zone as a facility given by government using input-output analysis. The impact will be measured as multiplier effect. The usage of input-output analysis differentiate this study with prior research. Input-output analysis is also used to provide priority sector of Batam, Bintan, and Karimun. This study finds that free trade zone facility provides total impact of Rp20.161,02 billion, but also shows that Batam, Bintan, and Karimun (Riau Islands Province) only provides the lowest multiplier effect compares to other provinces. By using priority sector, this study shows that from 22 development themes of Batam, Bintan, and Karimun, only 14 themes are worthy to be sustained and done. Therefore, the government needs to accelerate the integration within Batam, Bintan, and Karimun and other regions around them to boost their multiplier effect. Government also needs to reanalyze the feasibility of Batam, Bintan, and Karimun’s development themes. This study implies that from input-output analysis can be derived how effective the revenue facility given and what sectors which government needs to focus on to develop Riau Islands’ economies better. This study uses 2016 interregional input-output table, next study can be done using the latest interregional input-output table.

Rethinking Post-Pandemic Labor Policies: Insights from Precarious Workers in Indonesia

The current study aims at finding evidence of the impacts of economic shocks on the labor markets in Indonesia. Based on the findings, the study would like to revisit the feasibility of the current labor markets policy in the country that is currently moving towards labor market flexibility. To study the topic, this study used a dataset from the 2021 Inter-Regional Input-Output Table for East Java Province, Indonesia. In the analysis, econometric techniques were employed to: (i) identify vulnerable economic sectors to the economic shocks of the COVID-19 pandemic, (ii) determine the economic losses resulting from the reduction of outputs, and (iii) determine the impacts on the labor markets that resulted from the reduction in the final demand of the economic sectors. The findings of this study reveal that the sectors that had been most affected by the economic shocks are those that make a significant contribution to the gross domestic product and are heavily dependent on labor. Upon simulating the impacts of economic shocks on the labor markets, the labor-intensive service sectors are the most impacted and succeeded by labor-intensive manufacturing sectors and capital-intensive sectors. Hence, in opposition to the current labor markets policy, the findings suggest policymakers to adopt appropriate labor market policies that promote decent work while sustaining economic growth.

Measurement and driving factors of carbon productivity in China's provinces: From the perspective of embodied carbon emissions.

Carbon productivity incorporates economic development and carbon emissions within a unified framework for measuring the economic value per unit carbon emissions. In the context of climate change, improving carbon productivity is of great value for promoting low-carbon development in a country or region. From the perspective of embodied carbon emissions, this study constructs an embodied carbon productivity (ECP) index and uses the Logarithmic Mean Divisia Index decomposition method to study the evolution trends and driving factors of ECP in China's provinces based on China Interregional Input-Output Tables for 2002, 2007, 2012, and 2017. The following results were obtained: First, China's overall ECP showed a continuously increasing trend during the entire period, with the energy efficiency factor playing the largest role among all driving factors. Second, the ECP in 19 of the 30 Chinese provinces continued to increase and the contributions of energy emission ratio, ECP per capita, and population size factors to the increase in ECP presented evident disparities among different provinces. Third, the ECP in three major regions ranged from high to low in the order of East, Central, and West, with the largest growth in the Central, followed by the West, with the smallest in the East. Based on the analysis of research results, we proposed relevant policy recommendations to further improve China's ECP and achieve low-carbon economy.

Does the Participation Degree in Global Value Chains Influence Carbon Emission Transfer Through International Trade in Belt and Road Countries?

Studying the impact of global value chains’ (GVCs) participation degrees on carbon emission transfer through international trade (CTIT) in Belt and Road Initiative (BRI) economies is of great significance because these economies are significant participants of GVCs and international trade. The current study, through the inter-regional Input-Output table, calculated the GVCs’ participation degrees (forward and backward participation) and CTIT (carbon emission transfer through export (ETET) and emission transfer through import [ETIT] trade) of 27 BRI economies from 2005 to 2018 and investigated the impact of the GVCs on CTIT. Several test results illustrated that endogenous issues did not affect the robustness of study discussions. The study articulates appropriate environmental governance policies that could realise emissions reduction goals. Significant results are (a) participation degree in GVCs increases the CTIT in BRI; (b) energy intensity, energy structure, final demand and secondary industry escalate CTIT; (c) the optimisations of participation degree in GVCs, energy intensity development, industrial structure optimisation and increased awareness of emission lessening among the BRI community could compensate for the growth in CTIT from the constant deepening of GVCs. This study delivers a comprehensive insight into understanding the driving forces that cause the changes in CTIT from the GVCs’ perspective. JEL Codes: F02, F18, Q56

Agricultural Total Water Consumption Coefficient and Its Spatial Correlation Network in Yangtze River Economic Belt

Agriculture contributes extensively to the economic development of countries; however, it is one of the main water-consuming industries. Revealing the characteristics and network structure of agricultural water use efficiency (AWUE) is conducive to green and coordinated development of agriculture. Considering that analyzing the variation of AWUE is helpful to calculating the AWUE, this study aims to calculate the total water consumption coefficient of the agricultural sector in the Yangtze River Economic Belt (YEB) by using the China interregional input-output tables in 2012 and 2017. The gravity model was modified to deduce the spatial correlation network of agricultural total water consumption coefficient (ATWCC), and the social network analysis method was used to analyze the network structural characteristics. The results show that: (1) compared to 2012, the AWUE of YEB in 2017 improved, with a decrease of ATWCC from 532.5 to 387.5 m3/10,000-yuan, account for 27.2%; (2) The network relevance of ATWCC of YEB’s 11 provinces (cities) enhanced, the rank relationship within the network and the network structure was relatively stable; (3) The spatial correlation network formed several network centers, Zhejiang and Jiangsu in the eastern coastal area were the main destinations of the spatial spillover of the spatial correlation network.

Analisis Keterkaitan Antar Sektor dan Antar Provinsi dalam Perekonomian Kalimantan Tengah Tahun 2016 (Analisis IO dan IRIO)

Regional development does not only rely on the contribution of the economic sector in the region to the economy, but also the interaction of a sector with other sectors as well as inter-regional. The demand for goods and services outside the region has led to efforts to increase production so it encourage economic growth. In other words, economic development in one region is expected to trigger economic development in other regions. The purpose of this study is to determine the leading business sectors, the interrelationships between the business sectors, and the economic linkages of Central Kalimantan with other regions in Indonesia. Using the Input-Output Table (I-O) of Central Kalimantan in 2016, this study succeeded in identifying the leading business sectors in Central Kalimantan and the interrelationships between business sectors in Central Kalimantan. In addition, this study also uses the Inter-Regional Input-Output Table (IRIO) to determine economic linkages between Central Kalimantan and several provinces in Indonesia. The results showed that Iron Ore Mining is a leading sector and one of the leading business sectors in Central Kalimantan. In addition, in terms of regional linkages, it was found that changes in final demand in Central Kalimantan will have a major impact on output in DKI Jakarta, East Kalimantan, and South Kalimantan.

Inflation and Spatial Spillovers in a Large Archipelago: Evidence from Indonesia*

This study examines inflation dynamics in Indonesia, a large archipelagic country, using the Phillips curve specification. Utilising province‐level data from 2015 to 2019, the analysis accounts for regional interaction across Indonesian provinces and estimates spatial spillovers. To address the challenges of applying spatial methods to the world's largest archipelagic nation, two new approaches for the spatial weight matrix criteria are introduced: contiguity‐based from artificial boundaries (Thiessen polygons) and trade‐based from the Interregional Input–Output Tables. Furthermore, exploiting a new dataset, the study contrasts alternative measurements of inflation and output gap. These distinctions yield new findings. The results indicate the presence of a conventional Phillips curve in Indonesia. Different measures of inflation and the output gap have distinct spatial spillover effects.

Business Environment and Resource Allocation Based on the Perspective of the National Value Chain.

China is actively upgrading its industrial structure through industries transferring between developed and undeveloped areas; however, the overall level of the national value chain is still not high, and the asymmetric competition pattern between the upstream and the downstream has not been broken. Therefore, this paper establishes a competitive equilibrium model for the production of manufacturing enterprises, with factor price distortion, under the condition of constant returns to scale. The authors derive the relative distortion coefficients of each factor price, calculate the misallocation indices of capital and labor, and construct an industry resource misallocation measure. Furthermore, this paper applies the regional value-added decomposition model to calculate the national value chain index and matches the market index of the China Market Index Database with the Chinese Industrial Enterprises Database and the Inter-Regional Input-Output Tables through quantitative analysis. From the perspective of the national value chain, the authors study the improvement effect and mechanism of the business environment on the resource allocation in industry. The study shows that industry resource allocation will be improved by 17.89% if the business environment level is improved by one standard deviation. This effect is most prevalent in the eastern and central regions, not so much in the west; the effect of downstream industries in the national value chain is higher than that of upstream industries; the improvement effect on capital allocation is higher in downstream industries than in the upstream industries; and the improvement effect on labor misallocation is basically the same in both the upstream and the downstream. Compared with labor intensive industries, capital intensive industries are more influenced by the national value chain, while the effect of upstream industries is weaker. At the same time, it is well documented that participation in the global value chain can improve the efficiency of regional resource allocation, and the construction of high-tech zones can improve resource allocation for both upstream and downstream industries. Based on the results of study, the authors propose suggestions for optimizing business environments, suiting the national value chain construction, and improving resource allocation in the future.

Центральные места как концептуальный конструкт: построение структуры пространственных рынков в масштабах национальной экономики

The article is devoted to determining the possibilities of building the structure of spatial markets on the scale of the national economy. An overview of the works is given, thanks to which the idea of the interregional input-output model was gradually formed as an objective calculation basis for analyzing the functional base of the regions and building a network model of economic interactions within the framework of the concept of central places. The main attention is paid to instrumental developments that can be useful for creating a universal method for recognizing the structure of economic interactions in space based on interregional balances. Three approaches to the distribution of regions by levels of the functional hierarchy have been identified. The first approach is based on estimates of the nodal structure of space, the second is based on the ordinal function of the network of interregional interactions, and the third is based on feedback loops. It has been established that the number of hierarchy levels allocated using the first approach is minimal, and using the second approach – maximum. It is determined that the central place measure can be used to test the assumptions formed on the basis of alternative approaches regarding the hierarchical structure of economic interactions. With the help of the considered instrumental developments, the hierarchical structure of economic interactions of the regions of Japan is determined based on the interregional input-output tables for 2005. It is shown that the analysis of the functional base of the regions, integrating alternative approaches to the hierarchization of flows of the interregional balance, allows us to determine the structure of spatial markets on the scale of the national economy based on the following aspects of economic interactions: the difference in the masses of the central places entering into interaction; maintaining a balance of centripetal and centrifugal forces; maximizing the «gravity» of the centers of market zones

Regional inequality in China during its rise as a giant exporter: A value chain analysis

AbstractChina's exports success has implications for regional income inequality, because most of its export products are manufactured in the coastal zone. We propose a value chain‐based accounting framework to quantify the contributions of exports to regional income inequality. We employ newly developed interregional input–output tables for China, which distinguish between processing export activities and ordinary export activities. We analyze the period 2002–2012, the decade during which China became the “Factory of the World.” We find that an RMB of processing exports contributed much more to regional inequality than an RMB of ordinary exports or domestic final demand. Still, changes in regional inequality (increasing in 2002–2007 and decreasing between 2007 and 2012) are much more due to rising ordinary exports in the first subperiod and the growth of domestic final demand coupled with changes in the configuration of value chains in the second.

Embodied carbon emissions transfers via inter-regional trade: evidence from value-added extended decomposition model in China

The allocation of carbon emission reduction responsibility is severe issue in China for these years. In case to find a fairer and more effective way to divided the responsibility to each region of China, this paper examines embodied carbon emissions (ECEs) transfers in China's inter-regional trade by applying value-added extended decomposition model. This study allows policymakers to trace CO2 emissions at regional levels and provides three key findings. Firstly, using novel data on the physical consumption of energy by region, we observe a strong and robust negative association between the regional direct CO2 emission coefficient and the regional economic development level. Secondly, employing the latest inter-regional input-output table of China to calculate ECEs and uncover transfer characteristics via inter-regional trade, results show that central region, eastern region and northern region are the three highest ECEs regions. Thirdly, ECEs in value-added trade are generally transferred from inland China to coastal areas of China. Northeast region, north coastal region, central region and northwest region are net ECEs outflow regions, the rest regions are net ECEs inflow regions.

Makassar Strait Area Development in Indonesia Based on the Marine Economy Sector

The new capital city of Indonesia, Nusantara, having moved from Jakarta on Java Island to Kalimantan, is now officially located in the interregional area of the Makassar Strait. This area is expected to develop as the engine of the Indonesian economy, while various economic infrastructures are still very limited. The Makassar Strait area covers East Kalimantan, South Kalimantan, South Sulawesi, West Sulawesi and Central Sulawesi. These provinces have significant marine resource commodities and make a relatively significant economic contribution to the Indonesian economy as a whole. Using the data of the 2016 Inter-Regional Input-Output (IRIO) table which was updated in January 2021, this study aims to analyze the main sectors and inter-provincial linkages between each sector in the region. The results show that each province has a different main sector of economic development, which leads to differenct strategies based on their quadrants. Furthermore, the goal of provincial development as the new engine of the Indonesian economy is based on the assumption that the marine sector is on an industrial scale.

The Impact of the Information and Communication Technology and Electricity on Inter-island Interactions in Indonesia

The purpose of this study is to examine the economic interaction in Indonesia and the impact of the Information and Communication Technology (ICT) and electricity on inter-island interactions in Indonesia. Data used Indonesian Inter-Regional Input-Output (IRIO) table 2016. The result is the largest inter-island interaction occurred between Java and Sumatra, Java-Sulawesi and Java-Kalimantan. Java was more dependent on Sumatra than Sumatra's dependence on Java. Java was more dependent on other islands than other islands' dependence on Java. The impact of ICT on the economy was higher than the impact of electricity. The ICT had more impact on the interregional economy than intraregional. Meanwhile, the electricity had more effect on the intraregional economy than interregional. The intervention to increase investment in ICT resulted in the highest increase in output of Bali and Nusa Tenggara. Both when the intervention was carried out on Bali and Nusa Tenggara islands or in other islands. The same was true for electricity investment interventions. Therefore, Bali and Nusa Tenggara islands should be given more priority in ICT and electricity investment. Investment in ICT and electricity will accelerate the economic development of eastern Indonesia so that it can become a reference for equitable development.

Economic exposure to regional value chain disruptions: evidence from Wuhan’s lockdown in China

ABSTRACT Production fragmentation across multiple regions can result in a regional shock propagating along value chains to a wider array of regions. We propose a methodological framework to measure the economic exposure to regional value chain disruptions due to city lockdown during Covid-19. The exposure index is evaluated by applying a hypothetical extraction method to a regionally extended inter-country input–output framework incorporating China’s interregional input–output table. Our methodology can be adapted to conduct disaster impact analyses at city, state and country levels. It provides a tool for the immediate assessment of the economic risks of value chain disruptions, enabling quick policy responses.