Regional Economic Impact Assessment with Missing Input-Output Data A Spatial Econometrics Approach for Poland

Abstract

We propose a method of constructing multisector-multiregion input-output
tables, based on the standard multisector tables and the tools of spatial
econometrics. Voivodship-level (NUTS-2) and subregion-level data (NUTS-3)
on sectoral value added is used to fit a spatial model, based on a modification
of the Durbin model. The structural coefficients are calibrated, based on I-O
multipliers, while the spatial weight matrices are estimated as parsimoniously
parametrised functions of physical distance and limited supply in certain regions.
We incorporate additional restrictions to derive proportions in which every
cross-sectoral flow should be interpolated into cross-regional flow matrix. All
calculations are based on publicly available data. The method is illustrated with
an example of regional economic impact assessment for a generic construction
company located in Eastern Poland.