This study estimates the socio-economic impact of investments related to the Institutional Development Contract (CIS) for the city of Taranto on different categories of households, labor markets (skilled and unskilled), and enterprises in Italy by developing a multi-regional SAM (MR-SAM) model with inter-regional trade. The model is designed and implemented both at the level of Apulia region, to estimate the intraregional impact, and at the national level, to estimate the interregional spillover effects and the supply chain linkages. The study finds that the interregional effects are more than one half of the intraregional ones, with more than 26 percent of the interregional impact accruing to the Lombardy region and about 60 percent captured by the regions in the North of Italy. The model also shows that while the local Taranto economy is highly connected with the rest of the Apulia region, it has only weak linkages with the regions of Southern Italy. The ratio between the impact on added value at the national level and the total investment of the CIS is slightly more than 2. The study also suggests that impact analyses considering the area on which the public investment is developed as an island unconnected to the entire economic system may be misleading, because they provide no information about the propagation of the effects outside the administrative limits of the local economy, even though these effects may be crucial to fuel a desirable regional distribution of economic growth.
Creation-Date: 2023-03 File-URL: https://www.sitesideas.org/wp-content/uploads/2023/03/Sites_wp15.pdf File-Format: Application/pdf Note: SITES Working Papers 15 Number: 15 Classification-JEL: C67, D57, F14, Q56, Q58, R15 Keywords: Interregional trade, multi-regional input-output (MR-SAM) analysis, PNRR, Taranto (Apulia, Italy) Handle: RePEc:awm:wpaper:15