Findings on input-output in a small area context

Abstract

Even if the i-o method is a very popular instrument in regional studies in many countries, the generalizations concerning the crucial problems of its practical applications, i.e., compilation of a transactions table and assumption of coefficient stability, cannot be regarded as well-established. The present study deals with the methodological comparison of two i-o studies made at an interval of five years; the area under consideration is a small regional economy in Eastern Finland, Special attention is directed to the stability and influence of the most important coefficients, which are identified both on the basis of size and of a special index. Complementary findings are provided by analyzing sectoral time-series data on foreign import coefficients by regions. The conclusions derived accentuate the necessity of regional primary data in i-o accounts on the one hand, and the significance of random factors as far as the shifts of regional coefficients and their correspondence to the national ones are concerned on the other. The latter issue is obviously more important in small regional economies in highly integrated national economies, where the effect of distance on input structure by sectors is of minor importance.