Estimation of interregional trade coefficients and multipliers in the context of an interregional model

Abstract

The main purpose of this study is to construct a complete three region interregional input-output model which can be applied as a tool for regional analysis. In addition the model is applying to calculate the interregional trade coefficients and multipliers on the basis of 2010 data for 3 regions and 10 sectors of the Greek economy. The methodology used in this study is based on an interregional analysis of input-output. Besides, the interregional input-output matrix provides a complete description of the relations between industries and regions. In the procedure of estimating the interregional flows and trade coefficients the method of Chenery-Moses model was used. The results obtained show that the multipliers derived in the interregional matrices appear generally realistic. It is important to note that the empirical findings are first presented as well as the constructed interregional model for Greece. So, the construction of an applicable and reliable model was needed to bridge the existing statistical gap. With respect to the research limitations, the input-output analysis presupposes a rigid production technology away of adaptability to a changing environment. This limitation is well known and unavoidable in an input-output model. Concluding, the important characteristic of interregional analysis is to establish a base upon which future projections can be made about the role in driving one region’s economic growth. Therefore, the interregional input-output model reported by this study provides an indication to the policy makers how and which productive sectors have contributed to the growth of the regions.