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Multiplier effects under a disaggregate economic base model: Evidence from Greek non-metropolitan prefectures

Andreas Gkouzos (Department of Economic and Regional Development, Regional Development Institute, Panteion University of Social and Political Sciences, Athens, Greece)
Manolis Christofakis (Department of Business Administration, University of the Aegean, Chios, Greece)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 14 May 2018

Issue publication date: 14 May 2018

293

Abstract

Purpose

The purpose of this paper is to examine the multiplier effects of economic activities in the local economy of Greek non-metropolitan prefectures at NUTS3 level according to the Eurostat classification.

Design/methodology/approach

A disaggregate economic base model using OLS regression with clustered standard errors is implemented in 49 non-metropolitan prefectures and 17 economic activities for 2000 and 2012. The specific model indicates a clear picture of multiplier effects of economic activities among the prefectures as it has a similar logic to the input-output analysis while bearing in mind the spatial effects among prefectures. The specific model has not applied for testing base multipliers in the Greek economy according to the academic literature.

Findings

Non-traditional export-oriented activities play a significant role in the economic growth of the non-metropolitan prefectures. Their multiplier effects are higher than the traditional basic activities. Especially, some of these activities indicate strong shifts on specific local activities, which tend to be the significant multiplier effects on the overall local economy. Of course, the existence of agglomeration economies plays a considerable role in non-metropolitan prefectures with a significant population and non-metropolitan prefectures which are in insular space or belong to the perimetric and interior mountainous space, which are sparsely populated.

Originality/value

The specific model applies at the NUTS3 level, according to the Eurostat classification. Also, the model indicates that the multiplier effects come from non-traditional export activities, such as, information-communication, arts entertainment, health services, professional support services and real estate in the overall local economy. Finally, the spatial correlation influences the sectoral multipliers.

Keywords

Citation

Gkouzos, A. and Christofakis, M. (2018), "Multiplier effects under a disaggregate economic base model: Evidence from Greek non-metropolitan prefectures", Journal of Economic Studies, Vol. 45 No. 2, pp. 383-400. https://doi.org/10.1108/JES-12-2016-0259

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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