Integrating Organizational Proximity into Multi-Regional Input–Output Table Construction: A Spanish Case Study

Zenodo (CERN European Organization for Nuclear Research)

Abstract

High-resolution multi-regional input–output (MRIO) tables are important for tracing how economic shocks propagate across regions. Yet approaches that estimate bilateral interregional flows often rely on spatial proximity, potentially overlooking production and service linkages structured through corporate networks. We extend a Bayesian spatial econometric framework for MRIO disaggregation by incorporating organizational proximity, measured through directional headquarters–subsidiary linkages between regions. Applied to Spain, the framework disaggregates the national input–output table across 59 subnational regions at the NUTS-3 level and estimates sector-specific interaction functions combining spatial and organizational proximity. Results show that incorporating organizational proximity improves model fit relative to a spatial-only benchmark, with the largest organizational-proximity estimates found in construction and the service-sector aggregates. A simulation further shows that organizational proximity alters the estimated spatial distribution of shock spillovers, affecting which regions appear more exposed to shocks.

Authors 2

1. Zhang Jian-hua

   Utrecht University

   Affiliation as printed

   Utrecht University, Faculty of Geosciences

2. Hauke Ward Aachen Institute of Environmental Sciences (CML)

   Leiden University

   Affiliation as printed

   Leiden University, Institute of Environmental Sciences