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

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.