A Multiplicative Decomposition Method to Identify the Sectoral Changes in Various Developmental Stages: Taiwan, 1966–91

This paper examines the structural changes and identifies sources of sectoral growth in Taiwan, which is an open but rapidly developing economy. A multiplicative version of a decomposition based on the Leontief input–output model is proposed. Empirical results based on deflated data using the shifting base technique show that average changes in final demand coefficients, mainly in household consumption and exports, account for a large portion of sectoral change in most industries. Extensive variations in industrial structure are detected in various developmental stages.     

European Community Intercountry Input–Output Relations: Construction Method and Main Results for 1965–85

Eurostat constructs consolidated input–output (IO) tables for the European Community (EC) by means of an aggregation of the domestic and the intra-EC import matrices from the harmonized national IO tables. Intercountry EC IO tables can be constructed by disaggregating the intra-EC imports according to country of origin, with coefficients derived from international trade statistics. These procedures, however, produce inadequate outcomes for several reasons. The most important reason is that the imports are valued in ex-customs prices, instead of the theoretically more appropriate producers' prices. This paper analyzes the nature of these and other data problems, and describes a more extensive and satisfactory method to construct intercountry and consolidated EC IO tables. The empirical results are illustrated by an analysis of the domestic and intercountry intersectoral spillover effects for 1965–85.     

IMPLICIT ELASTICITIES AND PRICE EFFECTS: AN UPDATED PROCEDURE

Based on the general procedure described by Casler [(2011) Coefficient Change, Price Effects, and Implicit Elasticities: Estimating Microeconomic Determinants over Two Time Periods. Economic Systems Research, 23, 153–174], this paper presents an updated approach to the estimation of input coefficient changes as functions of changing prices. The procedure makes direct use of relationships that emerge from the model of cost minimization subject to producing a desired level of output. Based on an initial specification of constant cross-price derivatives, the imposition of adding up and symmetry conditions allows the actual price and coefficient changes that occur between periods to identify implicit own and cross-price derivatives and corresponding elasticities, using data for only two time periods. With this updated approach, the calculation of derivatives is far simpler and leads to far more accurate measures of price-induced input–output coefficient changes than the original version.     

Prices and factor demand in an endogenized input–output model

This paper combines factor demand functions (for intermediate input and labour) and price equations (derived from a Generalized Leontief cost function) with the traditional input–output price model. The cost functions determine factor demands for materials and labour as well as output prices at given input prices. At the second level of aggregation, the intermediate demand as a single input is split proportional to the elements in the column of the technical coefficients matrix. The emphasis in this endogenization of technical coefficients is on two features. First, the repercussion of output on input prices, and, second, the link between the econometric model for the supply side and the input–output demand model.     

Assessment of European Use tables at basic prices and valuation matrices in the absence of official data

Input–Output modellers are often faced with the task of estimating missing Use tables at basic prices and also valuation matrices of the individual countries. This paper examines a selection of estimation methods applied to the European context where the analysts are not in possession of superior data. The estimation methods are restricted to the use of automated methods that would require more than just the row and column sums of the tables (as in projections) but less than a combination of various conflicting information (as in compilation). The results are assessed against the official Supply, Use and Input–Output tables of Belgium, Germany, Italy, Netherlands, Finland, Austria and Slovakia by using matrix difference metrics. The main conclusion is that using the structures of previous years usually performs better than any other approach.     

Knowledge Flows,Patent Citations and the Impact of Science on Technology

Technological innovation depends on knowledge developed by scientific research. The number of citations made in patents to the scientific literature has been suggested as an indicator of this process of transfer of knowledge from science to technology. We provide an intersectoral insight into this indicator, by breaking down patent citations into a sector-to-sector matrix of knowledge flows. We then propose a method to analyze this matrix and construct various indicators of science intensity of sectors, and the pervasiveness of knowledge flows. Our results indicate that the traditional measure of the number of citations to science literature per patent captures important aspects of intersectoral knowledge flows, but that other aspects are not captured. In particular, we show that high science intensity implies that sectors are net suppliers of knowledge in the economic sector, but that science intensity does not say much about pervasiveness of either knowledge use or knowledge supply by sectors. We argue that these results are related to the specific and specialized nature of knowledge.     

Location, innovation and trade: The role of localization and nation-based externalities

This paper models locales that produce goods for trade outside their boundaries. We use a model that assumes monopolistic competition in both service and traded goods sectors; and, influenced by Porter (The Competitive Advantage of Nations, The Free Press, New York, 1990), we study the impact of both a localization externality and a nation-based externality. The localization externality is related to innovation that occurs because of agglomeration in the locale. The nation-based externality reflects the idea that some nations promote competitive industries more successfully than do others. We identify two types of comparative statics effects related to two distinct results of innovation.     

Decomposition of Structural Change into Technology and Price Components: Turkey, 1973–85

The purpose of this paper is to report on an approach to the analysis of intertemporal change in input–output tables in terms of the components of this change with time. We define two alternative forms of decomposition: additive and multiplica tive. The multiplicative form is found to have advantages over the additive form: it is not affected by the choice of price-adjusting mechanism and it enables us to define summary measures in the line of, for example, direct backward linkages. We apply the methodo logy to input–output tables for Turkey for 1973 and 1985, and compute the components of total change for 1973–85. We illustrate that, in economies where price changes across industries vary to a great extent, studying structural change first requires the removal of the relative price effects. Otherwise, misleading conclusions regarding the real or tech nological change are very likely.     

International trade,pollution, and economic structure: evidence on CO2 emissions for the North and the South

This study investigates the mechanics of international trade and CO₂ emissions in two blocs of countries (‘North’ and ‘South’) by analyzing data from the World Input–Output Database. We adapt the Miyazawa technique to estimate the linkages between international trade and the environment at a global scale. Therefore, this study is in line with the idea of highlighting the role of feedback effects as well as the nature and extent of extra-regional influences on an economy in response to an additional stimulus. This is a contribution that, to our best knowledge, has not yet appeared in the literature. Our results suggest that both the North and the South have become less pollution-intensive (technique effect) over the years. Interestingly and in contrast to much of the literature, we also find support to the hypothesis that the South has specialized in relatively more pollution-intensive activities (composition effect).     

Using Charm to Adjust for Cross-Hauling: The Case of the Province of Hubei,China

Data for the Chinese province of Hubei are used to assess the performance of Kronenberg's Cross-Hauling Adjusted Regionalization Method (CHARM), a method that takes explicit account of cross-hauling when constructing regional input–output tables. A key determinant of cross-hauling is held to be the heterogeneity of commodities, which is estimated using national data. However, contrary to the authors’ findings for Finland, CHARM does not generate reliable estimates of Hubei's sectoral exports, imports and volume of trade, although it is more successful in estimating sectoral supply multipliers. The poor simulations of regional trade are attributed to the fact that Hubei is a relatively small region, where there is a large divergence between regional and national technology and pattern of final demand. The simulation errors are decomposed into components reflecting differences between regional and national technology, final demand and heterogeneity. The third component is found to be the least important of the three sources of error.     

Women's and Men's Contributions to Satisfying Consumers' Needs: A Combined Time Use and Input–Output Analysis

The traditional input–output table (IOT) identifies the intermediate flows between industries, the branches' contributions to satisfy final demand and the primary inputs needed for production. While industries play a key role in the field of input–output analysis, the structure of employees remains more or less unconsidered. The present study aims to combine particular information regarding employees' working time with traditional instruments of input–output analysis. In so doing, employees (and the corresponding paid working hours) are separated by industries, educational achievements and gender. This, in turn, allows for the identification of women's and men's contributions to satisfying different categories of final demand. In total, men's paid working hours significantly exceed women's labour input. However, societies rely likewise on paid and unpaid work. Therefore, the study finally accounts for the field of unpaid work, which – in Germany – is still dominated by women.     

The Producer Service Sector in Italy: Long-term Growth and its Local Determinants

Abstract

This paper analyses the local determinants of producer service growth in Italy, focusing on agglomeration economies. From a methodological viewpoint, we address the critique on the Glaeser et al. (1992)-type employment growth regressions by deriving a reduced-form equation that incorporates variables affecting both local labour supply and local demand for the industry's output. At the same time, by implementing an error-correction approach, we improve on previous dynamic specifications that do not allow for short-term fluctuations along the steady-state growth path. It turns out that long-run employment growth is positively influenced by specialization, with a smaller role played by urbanization externalities. These results are in line with the empirical findings of recent analysis based on firm-level TFP (total factor productivity) estimates, thus providing them with a valuable cross-validation, considering that TFP measurement is far from being undisputed, especially in the service sector.

Le secteur tertiaire en Italie: expansion à long terme et ses déterminants locaux

RÉSUMÉ?La présente communication analyse les déterminants locaux de la croissance des services de producteur en Italie, en se concentrant sur les économies des agglomérations. Du point de vue de la méthodologie, nous axons la critique sur les régressions de la croissance de l'emploi du type Glaeser et al. (1992), en dérivant une équation à forme réduite incorporant des variables affectant l'offre de main-d’æuvre locale et la demande locale pour la production industrielle. Parallèlement, et en réalisant une méthode de rectification des erreurs, nous optimisons des spécifications dynamiques précédentes, qui ne tiennent pas compte des fluctuations à court terme le long du chemin de croissance équilibrée à taux constant. Il en ressort que la spécialisation influe de façon positive sur l'expansion de l'emploi à long terme, un rôle plus limité revenant à des facteurs externes de l'urbanisation. Ces résultats rejoignent les conclusions empiriques d'analyses effectuées récemment, basées sur des évaluations TFP au niveau d'entreprise, en apportant ainsi une importante validation croisée, les mesures TFP étant loin d’être contestées, en particulier dans le secteur tertiaire.

El sector de los servicios de productor en Italia: el crecimiento a largo plazo y sus determinantes locales

RÉSUMÉN?Este trabajo analiza los determinantes locales del crecimiento de los servicios de productor en Italia, centrándose en las economías de aglomeración. Desde un punto de vista metodológico, tratamos la crítica sobre las regresiones del crecimiento de empleo del tipo Glaeser et al. (1992), derivando una ecuación de forma reducida que incorpora variables que afectan tanto al suministro de mano de obra local como a la demanda local en relación con la producción de la industria. Al mismo tiempo, mediante la implantación de un planteamiento de corrección de errores, mejoramos las especificaciones dinámicas anteriores, que no tienen en cuenta las fluctuaciones a corto plazo a lo largo del curso de crecimiento continuo del estado. El resultado es que el crecimiento del empleo a largo plazo es influido positivamente por la especialización, con una menor función desempeñada por las externalidades de urbanización. Estos resultados coinciden con los descubrimientos empíricos de análisis recientes basados en estimaciones de la PFT, las cuales, aunque la medición de la PFT está lejos de ser innegable, les aportan una valiosa validación sesgada, especialmente en el sector de servicios.

     

The shared environmental responsibility principle: new developments applied to the case of marine ecosystems

Estuaries provide advantageous sites for both harbors and fish habitats. In many countries, harbor expansion in estuaries contributed to the decline of fish populations with impacts at the global scale. Restoring these habitats is important to prevent a global biodiversity crisis but is costly and potentially unaffordable for polluters under the Polluter Pays Principle. Such affordability issues prompt decision-makers to reduce environmental targets of restoration programs. Harbor infrastructures destroy fish habitats but generate benefits for society and contribute to the public interest, raising some questions on who is responsible for environmental degradations and who can afford environmental restoration costs? One way to allocate restoration costs is to analyze the amount of harbor services consumed by economic sectors. This paper addresses these questions by computing burden sharing scenarios with an input–output matrix. These scenarios are simulated under the shared responsibility principle to distribute restoration costs among stakeholders in the Seine estuary, France.     

Increase of electricity price and energy efficiency: analysis using the macroeconomic interindustry model of Taiwan

From 2012 to 2013, the price of electricity in Taiwan increased by 19.78%. This large increase forced producers to invest in improving electricity efficiency. In this paper, the macroeconomic interindustry model of Taiwan (MEIT) is developed to study the economic effects of high electricity prices and consequential improvement in energy efficiency. MEIT describes the structure of 47 industries, from both real and price-income approaches. To resolve inconsistent data, RAS is employed. A technical model is also integrated to consider technical feasibility, which offsets the usual shortcomings of technological analysis in an economic model. The iron and steel industry is taken as a case study. Estimated results indicate that higher electricity prices negatively affect Taiwan’s economy. However, improving energy efficiency can reduce some of this effect.     

Input–Output Analysis,Labour Scarcity and Relative Price Endogeneity: Aggregate Demand Disturbances in a ‘Flex-price’ Leontief System

In this paper, we introduce scarcity into a conventional demand-driven input–output system to produce a ‘flex-price’ Leontief model. We retain the fixed technical coefficients but allow changes in relative prices to reflect variations in the real wage. Because the consumption coefficients increase with the real wage, the aggregate labour demand curve is found to be upward sloping. This produces conventional results, as long as the labour supply curve is perfectly elastic (horizontal). However, once we introduce labour scarcity, in the form of an upward sloping labour supply function, we derive the seemingly paradoxical result that the output and employment effects of a demand expansion are greater here than in conventional input–output. Through simulation, this result is found to be strongly dependent on the assumption of export exogeneity.     

The cost implications of waste reduction: factor demand, competitiveness and policy implications

Manufacturing produces both good and “bad” outputs, such as waste, which have negative environmental effects. Economic (e.g., tax) and non-economic (e.g., reputation) incentives encourage firms to reduce waste. However, such practices are costly because decreases in output produced or increases in inputs used may accompany waste reduction. We employ a cost function approach to evaluate patterns of output and waste production and capital, labor, and materials use, for UK manufacturing plants. We find that costs of waste reduction generally imply increasing materials use and capital and labor input saving, but vary by county, region, and industry.

Structural change and blurred sectoral boundaries: assessing the extent to which knowledge-intensive business services satisfy manufacturing final demand in Western countries

This paper focuses on the vertical integration of knowledge-intensive business services (KIBS) into manufacturing sectors, using a subsystem approach to input–output analysis. It aims at correctly assessing the process of structural change that has occurred in the four main European countries (France, Germany, Italy and the UK) over time (1995–2005). It does not focus on KIBS sectors per se, but on their function as carriers and sources of knowledge which influences the performance of sectors, value chains and clusters across industries and within countries. The analysis shows that KIBS’ contribution to satisfying the final demand of manufacturing is in general largely underestimated; that KIBS vertical integration into manufacturing has increased over time in all the countries investigated except the UK; and that the extent to which manufacturing sectors outsource to KIBS is significantly affected by their technological intensity.     

Queensland State Impact and Projection Model: The Household Sector

The Queensland Impact and Projection model is an integrated input–output econometric model of the Queensland economy. Its purpose is to complement a conventional input–output model for analyzing economic impacts at the state level. This paper provides an overview of some of the methods used to model the household sector in an input–output framework, before describing the approach taken in the Queensland model. Some results which support the empirical performance of the model are also provided. It is demonstrated that the integrated model is a viable alternative and improvement on the conventional input–output model. The results are consistent with the static input–output model and conform to expectations about how the economy responds in real impact situations.     

Comparing forecasts from fixed and variable coefficient models: The case of money demand

In this paper we introduce a class of tentatively plausible, fixed-coefficient models of money demand and evaluate their forecast performance. When these models are reestimated allowing all coefficients to vary over time, the forecasting performance improves dramatically. Aside from offering insights about improved methods of analyzing time series data, the most promising direct use for point estimates derived from time-varying coefficients is as an aid in calibrating proposed models of the kind discussed here.