A new version of the location quotient for estimating regional input output tables: the centred location quotient

The construction of regional input-output tables presents several challenges. Ideally, a detailed survey of the regional economy would be conducted to determine the strength of relationships among sectors. However, a major limitation arises due to the large volume of data required, which may not always be readily available and entails high costs and lengthy delays. One potential solution to this issue is the adaptation of national input-output coefficients using methods such as location quotients (LQs) or constrained matrix-balancing techniques. This paper focuses on location quotient methods and proposes a new formula for estimating regional input coefficients. This explicit formula enables the measurement of the impact of primary inputs (including imports) on the coefficient estimation. To validate the proposed method, the multi-regional input-output table for Korea in 2015 and the Figaro database were used. The results of the investigation confirm the effectiveness of the approach