An Extension of the Hypothetical Extraction Method to Determine Key Regions: Backward and Forward Dependencies

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This study compares the full hypothetical extraction method (FHEM) with the partial hypothetical extraction method (PHEM) for identifying key economic regions, finding FHEM better quantifies region relevance by including final demand and value-added flows.

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This paper studies how to identify key regions using interregional input-output linkages, extending the hypothetical extraction method by comparing a partial hypothetical extraction method (which removes only intermediate inputs) with a full extraction method (which also accounts for effects on final demand and value-added). Using a theoretical decomposition (Rose & Casler) and an empirical application to Spanish regions, the authors find that under equilibrium full backward and full forward dependencies are similar, while the partial method fails to quantify regional relevance consistently because results differ depending on whether regions are analyzed from the demand or supply side. A key limitation explicitly stated in the framing is that the approach depends on equilibrium assumptions inherent to the decomposition and modeling. The paper does not explicitly discuss endometriosis or adenomyosis; it was included in the corpus via a keyword match in the upstream search index.

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Abstract

Abstract The study of the linkages between regions to identify key economic regions generally uses the hypothetical extraction method proposed by Dietzenbacher et al. (1993). This approach assumes a partial hypothetical extraction (PHEM), as it excludes only intermediate input flows. We use an extension of the hypothetical extraction method (Tormo et al., 2024), referred to as full extraction (FHEM), as the extraction of a region also affects final demand and value-added flows. In this study, the FHEM is compared with the PHEM, both from a theoretical point of view, based on the decomposition proposed by Rose & Casler (1996), and from an empirical point of view, applying it to Spanish regions. The results show that, in equilibrium, full backward and full forward dependencies are similar and the PHEM does not adequately quantify the relevance of regions since it varies depending on whether they are analysed from the demand or supply side. JEL Classification : C67, D57, R15
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An Extension of the Hypothetical Extraction Method to Determine Key Regions: Backward and Forward Dependencies | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article An Extension of the Hypothetical Extraction Method to Determine Key Regions: Backward and Forward Dependencies Paz Rico-Belda, Francisco G. Morillas-Jurado, Bernardí Cabrer-Borrás, and 1 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6563902/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 21 Nov, 2025 Read the published version in Journal of Economic Structures → Version 1 posted 5 You are reading this latest preprint version Abstract The study of the linkages between regions to identify key economic regions generally uses the hypothetical extraction method proposed by Dietzenbacher et al. (1993). This approach assumes a partial hypothetical extraction (PHEM), as it excludes only intermediate input flows. We use an extension of the hypothetical extraction method (Tormo et al., 2024), referred to as full extraction (FHEM), as the extraction of a region also affects final demand and value-added flows. In this study, the FHEM is compared with the PHEM, both from a theoretical point of view, based on the decomposition proposed by Rose & Casler (1996), and from an empirical point of view, applying it to Spanish regions. The results show that, in equilibrium, full backward and full forward dependencies are similar and the PHEM does not adequately quantify the relevance of regions since it varies depending on whether they are analysed from the demand or supply side. JEL Classification : C67, D57, R15 Interregional input-output model hypothetical extraction method backward dependence forward dependence and EUREGIO Full Text Cite Share Download PDF Status: Published Journal Publication published 21 Nov, 2025 Read the published version in Journal of Economic Structures → Version 1 posted Editorial decision: Minor revision 18 Sep, 2025 Reviewers agreed at journal 06 Jun, 2025 Reviewers invited by journal 06 Jun, 2025 Editor assigned by journal 06 May, 2025 First submitted to journal 05 May, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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