Hypothetical extractions from a global perspective

Erik Dietzenbacher, Bob van Burken, Yasushi Kondo

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

The hypothetical extraction method (HEM) has been widely used to measure interindustry linkages and the importance of industries. HEM considers the hypothetical situation in which a certain industry is no longer operational. HEM was developed for national economies, using national input–output tables. When performing HEM, it is assumed (often implicitly) that the input requirements that were originally provided by the extracted industry are met by additional imports in the post-extraction situation. Applying HEM to global multiregional input–output tables then causes serious problems. It is no longer sufficient to assume that the required inputs are imported. Instead, it is necessary to indicate explicitly how much is imported from each origin to replace the original inputs. Our adaptation of HEM is the global extraction method (GEM). As an illustration, GEM is applied to the extraction of the motor vehicle industry in China, the US, and Germany, using the 2014 WIOD input–output table.

Original languageEnglish
Pages (from-to)505-519
Number of pages15
JournalEconomic Systems Research
Volume31
Issue number4
DOIs
Publication statusPublished - 2019 Oct 2

Keywords

  • Hypothetical extraction method
  • globalization effects
  • industry linkage evaluation

ASJC Scopus subject areas

  • Economics and Econometrics

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