HWWI Research Paper

HWWI Research Paper 126

Regionalization of national input-output tables: empirical evidence on the use of the FLQ formula

by Julia Kowalewski
Hamburg, 2012

This paper contributes to the ongoing debate about deriving the value of the exponent δ when using Flegg’s location quotient (FLQ) formula which helps to simulate regional input-output tables. Using a survey-based regional input-output table, the empirical analysis provides evidence of an optimal δ for the German Federal of State Baden-Wuerttemberg. Furthermore, an extended formula (SFLQ) is introduced allowing for variation in δ by industry. Finally, this paper demonstrates the advantage of the SFLQ and finds evidence for a close relationship between the spatial concentration of an industry at the national level and its propensity to import goods and services from other regions.

ISBN 1861-504X