Generation of regional input-output tables: a spatial econometric approach with illustrative simulations for France, Germany and Poland

Abstract

This paper investigates the construction of multisector-multiregion input-output tables by using spatial econometric methods. I demonstrate that, under reasonable assumptions, the problem of finding Leontief's technical coeffeffcients can be formulated as a modiffied multi-equation spatial Durbin model and the missing parameters can be estimated via maximum likelihood. The resulting coeffi cients are computed as a function of country-wide coeffie cients, as well as distance and regional-sectorial data on value added. The statistical performance of the model is scrutinized and the method is illustrated with simulations of regional (NUTS-3 level) economic impact assessment - for generic companies located in Southern France, Germany and Poland.