A New Improvement Proposal to Estimate Regional Input–Output Structure Using the 2D-LQ Approach

Rubén Martínez-Alpañez, José Daniel Buendía-Azorín and María del Mar Sánchez- de-la-Vega ()
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Rubén Martínez-Alpañez: Department of Applied Economics, University of Murcia, 30100 Murcia, Spain
José Daniel Buendía-Azorín: Department of Applied Economics, University of Murcia, 30100 Murcia, Spain
María del Mar Sánchez- de-la-Vega: Department of Quantitative Methods for Economy and Business, University of Murcia, 30100 Murcia, Spain

Economies, 2023, vol. 11, issue 1, 1-17

Abstract: The use of location quotients for the estimation of regional input–output tables has been found to be a useful and efficient tool to estimate intraregional production coefficients and multipliers. This paper considers some regionalisation methodologies based on location quotients for the estimation of input–output tables—some of which have hitherto not been analysed at the regional level—and studies which one provides the best estimation (best goodness of fit). We focus the analysis mainly on the accuracy of Flegg’s location quotient (FLQ) and two-dimensional location quotient (2D-LQ). The analysis makes use of the multiregional input–output table for Korea for the year 2015 to evaluate the accuracy of the 2D-LQ method against FLQ. A novel proposal for the determination of the parameters corresponding to the 2D-LQ method is presented. This proposal is evaluated in Korean regions and is also applied to Spanish regions. The results obtained from the research conclude the general superiority of the 2D-LQ method, thus corroborating the results of other studies at the national level as well as the validity of our proposal.

Keywords: location quotients; FLQ; 2D-LQ; regional input–output models; interregional trade flows; regression analysis (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2023
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