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2023 | OriginalPaper | Chapter

3. A Regional Analysis Of Inputs-Outputs Of The Greek Economy: A Baseline Depiction Of Interconnections In Greece

Authors : Pagiavla Georgia, Pisinas Yorgos

Published in: Interconnections in the Greek Economy

Publisher: Springer International Publishing

Abstract

Input–output tables represent both a set of empirical data and a theoretical tool for studying the interconnections and the internal structure of an economy. The method at hand has been widely used both internationally and in Greece to investigate the structuring of the Greek economy and draw conclusions regarding industrial policy and optimal planning for the country. The Greek Statistical Service regularly publishes tables about the entirety of the country which are utilized in this research. Despite the great wealth of studies, there is a large gap in the national literature regarding sectoral interconnections at the level of the country’s various peripheries, although Regional Analyses of Inputs-Outputs have been in wide circulation for decades. Research interest has recently shifted from the national to the regional level, given that the economy is not a non-spatial entity and that interregional trade features greatly in the relationship between the periphery and the center. The aim of the present chapter is to introduce a methodology by means of which input–output tables can be generated for Greece’s several regions and which can then be used to create a basic outline of the sectoral/regional interconnections that occur in the country.

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Normally, a table has 4 parts (Ü & Hewings, 2013); here, we focus on the 1st part which refers to the sectoral exchanges for intermediate products and makes up the nucleus of the table, with the remaining parts corresponding to ultimate demand, imported intermediates together with the added value of the contributing factors and the imported final goods.

For these two kinds of basic information, different type of tables need to be used, respectively Leontief and Ghosh (1958) types is the proper type providing us with this information (cf. Markaki & Papadakis, 2023a, 2023b; Oosterhaven & Hewings, 2013).

Leontief’s reverse table provides a measure of the impact on the economy when a sector’s ultimate demand rises by one unit. This is known as multiplier of the sector (Holt, 2017, p. 12).

See Markaki 2018 (Cf. also Leontief, 1991; Livas, 1994).

From an economic standpoint, this hypothesis appears excessively strict as it means the inability to substitute inputs. However, as argued by Leontief (1966, 49) this is particularly sensible from a technical point of view, and, also, empirically observable. To produce a cake, one could replace sugar (with honey, glycoprotein, stevia, or some synthetic sweetener) which is of enormous value for an economist, but ultimately, a cake needs to have a minimal amount of sweetness and every confectioner is aware that these proportions are not to be played with. As economists, we need to hold on to the fact that the use-values of products play an irreplaceable part in production which Leontief (1966, 9) had in mind when he noted the value of “experts with practical experience in each field”.

See footnote 5.

If the value of the participation quotient is equal to 1, the economic activity (i.e., the sector) under examination is balanced (an alternative phrasing would be that the particular region is “self-sufficient” in terms of the sector under examination) while, if the value of the LQ ratio is greater than 1 (or greater than 1,25 according to a different view), the activity ought to be considered as basic, i.e., there will be a surplus in the sector and this surplus will be exported interregionally or abroad.

If this value is smaller than 1 (there is also the view that it should be smaller than 0,75 but in most empirical applications, the unit is used as a “boundary”), this activity is considered as “non-basic” and this means that for this activity, there will be pure imports (For more details, cf. Rovolis et al., 2016).

The λ parameter which concerns the relative size of the regional economy, is given by the formula λ = [log₂(1 + x_r/x_n)]^δ and it is a parameter controlling the degree of convexity in the equation so that, the greater the value of δ, the lower is the value λ and the greater the margin for more regional imports.

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Title: A Regional Analysis Of Inputs-Outputs Of The Greek Economy: A Baseline Depiction Of Interconnections In Greece
Authors: Pagiavla Georgia
Pisinas Yorgos
Publisher: Springer International Publishing
Book: Interconnections in the Greek Economy
Print ISBN: 978-3-031-31334-9

Electronic ISBN: 978-3-031-31335-6

Copyright Year: 2023
DOI: https://doi.org/10.1007/978-3-031-31335-6_3