Evaluating Impacts of the New Industry on the Regional Economy: Petrochemistry in the Far East

Natalia Dzhurka () and Olga Dyomina

Spatial Economics=Prostranstvennaya Ekonomika, 2020, issue 1, 51-65

Abstract: The authors evaluate the effects generated in the economy of the Russian Far East by the emerging petrochemical industry center, its core in Amursk gas processing plant. The calculations are based on the regional social accounting matrix for 2015 augmented with data on gas processing and petrochemical technologies, consumption of their products. According to the assessment, with the output of new industries at 38 BCM gas and 2 MT polyethylene the regional GRP will increase by 13.9% against 2015. Also, with prevailing export orientation of the new industries the highest increment of gross output is expected in gas extraction, oil processing and electric power industry. In terms of the concept of sequential interindustry modeling, the authors estimate the temporal distribution of the obtained integral effects. In view of the above, the opportunities of two methods are revealed, the analytical and the numerical one. It is demonstrated that despite the similarity of the economic contents in both calculation methods the measure of their convergence is different as their drivers are different: the external demand for new products is behind the choice of the analytical method while the gross output is behind the numerical one. In our case a high share of external demand in the gross output of new production levels out the difference between the effects of the two methods. The researchers conclude that without lags in production and consumption the integral GRP increase will be obtained by cycle 40 (or by 2055), with lags – after cycle 50 (or by 2065). The maximum discrepancy between the two trajectories of the macro indicator (without and with lags) will be observed in the period up to cycle 25 (to 2040)

Keywords: macroeconomic modeling; social accounting matrix; technology; fuel and energy sector; petrochemistry; economic effect; trajectory; region; Russian Far East (search for similar items in EconPapers)
JEL-codes: C02 E27 R11 R15 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:far:spaeco:y:2020:i:1:p:51-65

DOI: 10.14530/se.2020.1.051-065

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