An 1-0 analysis is developed by the construction of a transactions table. This table is a matrix that shows how inputs and outputs of each industry are distributed among other industries and sectors of the economy. The transactions table can be utilized for futures projection. Its major advantage is that it ensures that projections for individual industries and sectors will add to a total projection. The 1-0 technique’s greatest utility is for short-run forecasting. However, there are problems related to 1-0 analysis. It requires tremendous personnel and capital resources. Data availability also strictly limits the us( of 1-0analysis. Finally there have been questions as to the adequacy of 1-0 analysis for such aspects as economies of scale, localization economics, and regional cost variations. Hence, the 1-0 technique has been judged inappropriate for predicting locations of economic activity. 2.3.3 Correlation and Regression Analysis To analyze the variables that are normally related to understanding the spatial location of industry, multiple correlation and regression analysis may be used as valuable analytical tools. Correlation methods provide measures whereby the past relationship between two or more variables can be identified. Multiple regression techniques are used to test theories of location patterns and generate equations which may be used to predict location of industries with no statistical records (i.e., no history). It cannot therefore be used specifically for SPS, although it can be used to learn about industrial location in general. The primary limitation of this method is that a variety of high-quality data must be collected. Another limitation is that regression analysis explains locational patterns on the basis of conditions at a particular time. In a mature industrial region, many industries have located under sets of factors that have changed over time. Finally, a strong statistical relationship does not necessarily indicate a strong cause-and-effect relationship. 2.3.4 Export-Base Theory Export-base theory involves making a distinction between industries in a region. A dichotomy is made between those activities in which a region specializes, and those activities which are not unique to it. The economic
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