Regionalization of National Input–Output Tables: Empirical Evidence on the Use of the FLQ Formula

Abstract

Kowalewksi J. Regionalization of national input-output tables: empirical evidence on the use of the FLQ formula, Regional Studies . Flegg's location quotient (FLQ) can be used to simulate regional input-output tables, and this paper contributes to the ongoing debate about deriving values for the exponent δ in this formula. Using a survey-based regional input-output table, values of δ are derived for the German federal state of Baden-Wuerttemberg. Furthermore, an extended formula - called industry-specific FLQ (SFLQ) - is introduced which allows for variation in δ by industry. Finally, the advantage of the SFLQ is demonstrated and evidence is found of a close relationship between the spatial concentration of an industry at the national level and its propensity to import goods and services from other regions.