Regional size, regional specialization and the FLQ formula

In examining how regional size might affect regional input-output coefficients, MCCANN and DEWHURST, 1998, raise some concerns about our FLQ formula for estimating such coefficients from national data. In particular, they point to the need to consider regional specialization when modelling regional economies. However, our empirical work using Scottish data shows that the inclusion of a measure of regional specialization in LQ-based formulae does not yield more accurate estimates of regional coefficients. We rnd too that the FLQ invariably outperforms its main rivals, the SLQ and CILQ.