A Note on the Flaws of MFA (Minimal Flow Analysis)
Louis De Mesnard
University of Burgundy and CNRS; University of Illinois at Urbana-Champaign - Regional Economics, Application Labratory (REAL)
January 3, 2012
MFA (Minimal Flow Analysis) is a method of qualitative input-output analysis used for identifying national of regional industrial clusters. It is based on the analysis of layers (in an input-output model, flow matrices generated at each iteration toward equilibrium). We show through theory that all normalized layers (column-coefficient matrices computed from each layer) are equal in MFA. This is illustrated by an application to France's 2009 input-output table. Therefore, the information brought by one layer is identical to those of another layer: layers bring no specific information, which unfortunately implies that MFA is not a good tool to study intersectoral linkages, despite the interesting character of the topic.
Number of Pages in PDF File: 18
Keywords: MFA, Minimal Flow Analysis, Qualitative Input-Output Analysis, QIOA, industry cluster, intersectoral linkage
JEL Classification: R10, R11, R58, R15working papers series
Date posted: January 3, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo1 in 0.391 seconds